How to balance consumer trust with data-driven marketing

Brands including IAG, Westpac and Scentre Group debate the art of building consumer trust in the face of data utilisation

Failing to factor in customer value and using consumer data only for commercial gain is a sure-fire way to destroy trust in your brand, IAG’s data governance leader claims.

Speaking on a panel at the latest ADMA Town Hall event in Sydney, IAG director of intellectual property and data governance, Michelle Pinheiro, said the art of building trust when using customer data comes down to understanding and respecting the value exchange that occurs between the two sides.

“If there is no benefit to the consumer, you should rethink about your use of the data,” she advised attendees.

“It’s all about the value exchange the consumer gets out of providing their data. If they feel the exchange is worth their while – and those that seem to rank highest are gaining access to free services, or saving money, or getting product offers or social networking – then they’re more inclined to provide data. And they care; it’s a conscious decision. They also care if the value exchange is not in their favour.

“It’s important for companies to consider what the consumer is getting out of the exchange. You are building trust when you’re providing them with an experience that rewards them.”

There’s an opportunity to use data build a stronger relationship with consumers by providing consistency in the experiences you provide to the customer, Pinheiro continued.

“The more consistent, the more you build trust,” she said. “And as brands build that information, the consumer will provide more information.”

Westpac state manager NSW ACT, consumer connect now, David McQueen, agreed brands needs to consider their use of data in terms of business problems or customer problems. “If you’re doing it purely from a commercial point of view, you will struggle with using data with customers,” he said.

One example of how Westpac uses data insight is ensuring consumers about to embark on international travel inform the bank to avoid having their credit card put on hold. The initiative is driven through its mobile app and taps location to send real-time alerts to customers on their way to the international airport.

“There’s no rational corporate gain from us delivering that service,” he commented. The key is to think like a customer.

“You need to look from an ethical perspective, which is what we try and do as a bank. When you have 30,000 employees, who makes the choice on using data is an extremely complex decision,” McQueen said. “It comes down to having a robust ethical position. You can’t just have black and white rules, you need a customer-centric culture that puts the customer be at the heart of what you do.”

Recognising data as an asset

For Data Republic co-founder and CEO, Paul McCarney, recognising data as a competitive advantage starts with companies valuing the data they have and listing it on the balance sheet as an asset. He claimed one of the biggest challenges corporates face is not having a commercial value attached to their data.

“Every board around Australia talks about data as an asset, yet no one has it on their balance sheet as an intangible value,” he said. “As soon as that happens, data will be treated with more respect and they’ll start to think about it as a currency they can leverage as opposed to something they hold close to their chest.”

McCarney also argued governance processes around data-based decision making are still evolving. He noted the rise of the chief data officer as one way of dealing with this.

At IAG, Pinheiro is trying to drive a cultural shift in order to recognise the importance of data as IP and competitive advantage.

“One lens we look at with everyday usage is: Are we giving away competitive advantage by sharing data?” she said. “We have done a lot of work to carve up data in our systems into assets and have a catalogue of those available across the enterprise. But you don’t just give that away to everyone.

“Then we have this concept of data products… those are the things we can share with councils and various other organisations we are affiliated with. By doing that, we keep our data assets intact, and we never compromise them.”

The issue of transparency

Panellists also debated the importance of transparency and control when it comes to consumer data and how this needs to be addressed.

McCarney believed transparency was the element often missing around consumer data usage. This transparency needs to be apparent at the point of data collection, as well as when it’s used, he said.

“If brands think about the relationship they have with their consumer, there are two points to it. The first is the point where they collect data,” he explained. “The engagement proposition for business models is evolving, and we are seeing what the revenue models of the past turning into engagement models. That means the utility that is being collected… is now transferred into data and context about the individual.

“It could be search, or subsidised phones, but the data is becoming the core element being monetised. That may not be overt to everyone. And that needs to be – you need to be transparent at the point of collection on what you’re planning to do with the data upfront.”

Then at the point of use, transparency is important again, McCarney said. “The more you’re overt, the more there is a real value exchange.”

One of stumbling blocks, however, has been how brands provide such information to consumers. The most common form is privacy documents, but all panellists agreed these leave a lot to be desired.

“Most privacy documents are all the same, and written from a compliance perspective,” Pinheiro said. “At IAG, we’re applying human-centred design to our privacy, and looking to create something that is for the customer, with transparency in mind.”

Ultimately, the choice of how data is used sits with the customer, Scentre Group director strategic analytics, insights and research, David Lamond, said. Test-and-learn is a key way of discovering where that line is.

“It helps if organisations are clear on what decisions are going to be made based on the data you have and the data you want to have,” he added. “What we have found is if you set off down that journey, you tend to get everyone to come with you. Then you can take the next step – now those things are working, are we clear about how we’re measuring all aspects of the customer experience, and how we’re going to use that to make even better decisions in the future.”

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