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[17 comments]

When personalized offers touch a nerve

June 5, 2014

Through a special arrangement, presented here for discussion is a summary of a current article from Retail Customer Experience, a daily news portal devoted to helping retailers differentiate the shopping experience.

What's often missing in the Big Data debate is that what is simply data to a retailer can have emotional meaning to customers.

That member of your loyalty program who purchased a carton of cigarettes for the first time in a year? It's a data point to a retailer, but a sign of a shattering defeat to that loyalty card member. That engagement ring purchase? To a man or woman left at the altar, kind reminders to come in for a free cleaning are salt in a wound.

This is a story about a woman named Brianna. In her early twenties, Brianna got pregnant. The situation wasn't ideal, but she was excited and set up a baby registry on Amazon. "I was young, I hadn't heard the wisdom of waiting until after the first trimester to, you know, act pregnant," she said.

She lost the baby. She went back to Amazon and deleted the registry, but e-mails from vendors continued to pour in. Carefully timed offers over the months cheerfully reminded with her variations on "the baby's almost here — do you have everything you need?"

"It was a punch in the face, every time," she said. She eventually turned to spam controls as a sort of nuclear option.

"Since I'm a web developer, the assumption that I must have allowed Amazon to share my e-mail with those vendors (because I didn't) click the right checkbox when setting up the registry just added to the overall self-loathing and guilt I was feeling for not doing pregnancy right, not being good enough to be a mother," she said.

Brianna today has two healthy children. She's getting special offers for both of them — often creeped out that they contain so much specific information, since she said she never signed up for a single thing with the second child.

She's given a lot of thought to how retailers might be more sensitive to things going on in the lives of their shoppers when they make it their business to know about those things. If she had bought a book on grieving pregnancy loss, would Amazon have known to back off? What about all those mommy blogs she was reading about coping?

Big data is, of course, not the kind of thing that lends itself to individual decisions about individual customers. That doesn't scale. But that makes it so much more important that retailers be very, very careful about how they use it.

Discussion Questions:

Will the occasional insensitive offer have to be one of the concessions of increased personalization? Are there ways to significantly reduce or prevent such awkward or painful offers?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

What's the likelihood that retailers can learn to prevent insensitive offers while continuing to persue personalization?

Comments:

As long as we deal with computers and not people, we will have to deal with these concerns. As we all know, a computer will say that a watch that does not work is right twice a day while a watch that is five minutes slow is never right. While it hurts for a short time, I think most of us can handle it.

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Frank Riso, Principal, Frank Riso Associates, LLC

The trouble with big data is that it requires algorithms and predictive analytics in order turn data into marketing offers that fit patterns. While algorithms allow "scale," but they are definitely not personal at the individual level.

Algorithms can enable harvesting big data to market to patterns and characteristics. While these data filtered offers have the potential to be more relevant to a segment of consumers, there is no way to decipher the personalized impact for each consumer.

A major opportunity to significantly reduce awkward and negative emotional impact is through true opt in/out options at the individual consumer level. But the retailer/marketer must make opting out clear, easy, and then respect the consumer choice. Woe be to any retailer who violates consumer trust by using opt out data for marketing.

An other alternative is to carefully utilize loyalty CRM data which is collected from the individual with opt in/out designations. It's a lot more work and long term but much more accurate at the personal level.

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Chris Petersen, PhD, President, Integrated Marketing Solutions

Not necessarily, but the case cited shows two sides of the coin here. On one hand, consumers need to be vigilant to a certain degree when registering with retailers or brands and understand what they are agreeing to. In this case, Amazon should do a better job of elevating the consequence of allowing other companies to contact you if you don't opt out. Amazon could also employ better data and analytics to understand sentiment as cited in the case of purchasing the book on grieving.

In general, a simple near-term solution for retailers and brands alike is to include in their communications statements such as "we attempt to communicate with you in the most relevant way - if we have missed the mark please let us know by updating your registration or you may opt out of all communication including those of third parties."

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Gib Bassett, Global Program Director for Consumer Goods, Teradata Corp.

The only way (not fool-proof though) to get the most from any data pool, be it big, loyalty, POS, WMS, etc. data, is to invest in personnel to monitor, analyze and act. Food retailers in the US have been reluctant to make this investment in the past. A few are getting with it now, but I think we still have a long way to go as an industry.

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Dan Raftery, President, Raftery Resource Network Inc.

These stories expose the Achilles Heel of leveraging big data for personalized marketing communications: In the absence of any broader and nuanced context as to the current state of a customer's relationship with a brand, the messaging will be assumptive in nature, leading to these unfortunate, less than optimal and emotionally upsetting offers.

The reality is, personalized marketing is nowhere near the level of sophistication needed to understand the multifaceted layers of a customer's life (and frankly, consumers in many ways prefer that it not be), and these types of painful brand experiences are most likely going to be a by-product of attempting to at least be relevant to the majority.

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Jeff Hall, President, Second To None

Recently I attended a conference on trends in digital marketing. There were enough speakers and attendees to raise a similar question. And the answer I heard over and over again is that there are no plans in the works to reduce or prevent painful or personally irrelevant offers. Because the cost is so low to transmit the messages, any return is welcome. The cost to reduce the messages is high and there apparently is no viable or noteworthy ROI. Too bad.

I'm hoping some retailer figures it out. It will definitely be a point of differentiation and reason for customer loyalty.

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Joan Treistman, President, The Treistman Group LLC

The more personal you make the communications, the more risk there is involved. Deep analytics capabilities can help. However, when life events occur, merchants and brands will not always receive the news. There are no guarantees in this biz, sorry.

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Ralph Jacobson, Global Consumer Products Industry Marketing Executive, IBM

One significant way to fix this is a class action filed against the industry for emotional distress - I'm not serious...but it would at least get Zuck's ear and something may happen.

I suppose there are certain tags that by nature may be problematic - perhaps reporting and enabling easy opt-out on these sensitive tags might be something the industry might consider - but as for the rest: advertising pays for things that are free.

Vahe Katros, Consultant, Plan B

It comes down to respecting the client's wishes. Not opting in to mail is the same as opting out. The retailer needs simply to ask if the customer wants to receive more offers (as most do), and if the answer is no, it's no.

If a shopper allows the mailings and later changes their mind, then make sure the request to cease is honored.

This of course implies the retailer has control over who has the contact information. Not so easy if it's sold to others.

Simple solution in my mind.

Lewis Olishansky, Principal, Retailmatics

Whenever we jettison the human contact element of relationships, we are at a much higher risk of the out-of-touch or even offensive contact. The true purpose of communications is to have a dialogue. Many companies focus too much on speaking and far too little on listening. It will be interesting to see, in the long run, whether big data will be a help or a hindrance to commerce.

Consumers are finding it hard to navigate through cryptic verbiage on how their information may be used or shared. It leaves them vulnerable to these types of big data gaffs. That and issues with cyber piracy of their personal information is turning people away from purchasing online.

People are made up of stories. Data is only points of information. It takes a lot of points to render an accurate account. I still prefer shopping at stores where I can interact with people. No matter how much personal information my computer has gathered about me, it still can't smile back.

'RetailRetell'

As someone who's been either directly involved, or involved on the edges of the retail industry my entire adult life, I am increasingly appalled at the "all your data belongs to us" mentality I see everywhere now. I shake my head at the "sure, we're going to make some mistakes when we target you - but that's life, just get over it" attitudes I hear and read.

When you've permanently lost your best friend Rover and the sale announcements and coupons for the food he formerly ate pour into your inbox along with messages like "we want you back and here's a $5.00 coupon" it breaks your heart anew and can't help but damage the relationship with that retailer. When a family buys/orders adult diapers for an elderly relative or baby diapers - which suddenly are no longer needed because of the death of that grandparent or baby, the hurt is palpable and cruel when the "offers" come.

Customers should not have to be the ones responsible for opting out of this mad rush to use their data.

'Liatt'

There's always a risk when you get personal. It's true in life, and it's true in retailer loyalty programs. That doesn't mean impersonal should be your strategy, in life or in retailer loyalty programs.

'RetailGator'

In my view, big data is scalable and the onus is on the retailer with the loyalty program to work with their IT team, programmers, consultants to create algorithms and quality control programs that include a prompt to contact loyalty program members on a bi-yearly or quarterly basis to request information updates.

If a customer takes the time to sign up for a loyalty program, than they should be rewarded with a positive experience. The retailers' sensitivity to the customer user experience is key and can always be improved.

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Karen S. Herman, Founder & Design Director, Gustie Creative LLC

This is one of the problems of a one-size-fits all, one-way data flow.

Retailers have to give customers the opportunity to have input into offers like these. We've got to figure out a way to let customers tell us what they want, rather than trying to figure it out ourselves.

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Cathy Hotka, Principal, Cathy Hotka & Associates

These moments, sad and insensitive as they might be, are the exception to the basic rules. Since we live in an electronic age, the problems will continue as much as we would like to think it could change.

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Ed Rosenbaum, CEO, The Customer Service Rainmaker, Rainmaker Solutions

The danger is not only in "insensitivity" but also in a roundabout way, affecting a person's credit report which in turn affects EVERYTHING in life. My example: Divorced in early 2000s, now-ex-husband moves to an adjacent state and sets up his residence. Shortly thereafter (within a year) he received a cute little promotional pen in the mail...with my name on it. No reason as to why he got it mailed to him and he didn't pay attention to what company it came from so I never found out.

Flash forward a year, I go to check my credit report. Lo and behold, my current address is now HIS NEW RESIDENCE that I have never, ever lived in or set foot inside of. I attempt to delete the info on all three credit bureau's reports. They tell me I CAN'T because it's "historical data." I say, I never lived there and never will and it's not my current address. They say "No, sorry, still historical data." EVEN IF IT'S FALSE.

Don't kid yourself, YOU have no control over your own information, even if you're in the "industry." If I knew what company had sent that pen: 1) I would never do business with them EVER and would tell everyone I knew, 2) would demand to know how they got my information tied to his new address and 3) demand they delete my information and 4) possibly sue them for screwing up my credit report and many more things.

I'm still angry about this today - 13 years after the fact! And that info is STILL on my credit report. As marketers, we need to take a deep breath and really THINK HARD about what we are doing to our customers and to the world at large before we press the OK button.

'StephISM'

Small data is what was really needed. Often people get the whole big data thing wrong. It is great for spotting trends on a macro level but if you want to do personalization, that's really not big data. That is small data and data that is highly relevant to the customer. Spotting that she had cancelled the registry should have been a sign that was ignored. Amazon failed on personalization and customer experience. Data is data, unless you act on it, it just does what you tell it to do.

Edward Chenard, Innovation Lab Leader, Target

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