Photo: @damianews via Twenty20
Why are brands so bad at identity resolution?
According to recent research for Epsilon-Conversant conducted by Forrester, only half of brands are capable of fundamental identity resolution, like accurately finding customers across devices, controlling their messaging frequency and sequencing and building a unified customer profile.
The survey of 205 brand marketers found that, although 66 percent of brands have an ID strategy that is at least one-year-old, the great majority are still struggling in multiple areas:
- Persistence: Seventy-one percent struggle to maintain accurate IDs of their customers over time.
- Recognition: Sixty-nine percent struggle to understand what percentage of an addressable audience is active and reachable.
- Scale: Sixty-three percent struggle with the size of their identity program or the amount of the addressable audience they can reach.
- Accuracy: Fifty-eight percent of respondents said their brands face challenges with how precisely their identity resolution programs are able to message the correct person across devices, browsers and touchpoints.
- Privacy and Compliance: Forty percent struggle to ensure that opt-outs and customer privacy controls are in place.
One shortcoming revealed in the survey was the limited scope of identifiers. Most identity resolution programs rely on identifiers like email, IP addresses or login data but overlook identifiers such as offline transactional data (just 31 percent are using it). An overreliance on first-party cookies holds greater risk for privacy regulations.
Other shortcomings include inconsistent connection to measurement and a failure to tie programs to performance. The top challenges were seen as determining the right audiences for online campaigns (56 percent); improving performance and measurement of customer marketing (52 percent); optimizing online campaigns (50 percent); and personalizing online campaigns (47 percent).
Getting identity resolution right is important, as poor efforts in this regard can lead to problems such as reaching the wrong customer (45 percent), wasted marketing spending (42 percent), offering irrelevant products or services (38 percent) as well as lost opportunities for cross-sells or upsells, per respondents.
Discussion Questions
DISCUSSION QUESTIONS: What do you think are the current best methods for accurately and persistently identifying consumers across online and offline interactions? Is the bigger opportunity around identity resolution capitalizing on lesser-used sources or improving processes?
Poll
BrainTrust
Bill Hanifin
CEO, Hanifin Loyalty LLC
Ken Morris
Managing Partner Cambridge Retail Advisors
Consumers are demanding consistency across channels and knowing the customer is key to that. But the challenge is, how do you do that without it being perceived as creepy? I feel very much like this has been somewhat of an “elephant in the room” in terms of how do you identify the customer without any concerns about invasiveness? I wonder if encouraging customers to use a single app but also to interact with the app even during a physical interaction can be a way forward.
The top business objective noted by CMOs in the survey is to improve customer satisfaction. Today, customers have high expectations for the way their data is used. Without improving the ability to consistently identify the customer, increasing customer satisfaction levels will be a constant struggle.
Email is still the best way to identify a customer online but I believe whether a customer is shopping with a mobile device, a tablet, a laptop or in a store all these need to be considered online transactions. We must integrate the store into the equation and connect it in real-time. The missing offline transactions account for 85 percent of the purchase history for a customer but we treat it as if it doesn’t exist because of our antiquated and siloed legacy systems.
Loyalty programs, IP addresses, phone numbers and postal addresses are all valuable and need to be leveraged to insure accurate capture and attribution. The real challenge is to include what is referred to above as offline transactions. The stores need to be wired into the web transactions in real-time to create a unified approach.
What good is it to know what I bought after I leave a store as opposed to talking to me electronically before checkout and across channels?
The idea of half of brands being able to identify their customers seems wildly idealistic; even identifying an IP address provides next to no insight into the customers at that address and their motivations for purchase. Brands might want to provide clearer incentives.
Connecting online and offline is the Holy Grail for marketers today, but it’s also a fine line to walk between “give me personalized service” and “don’t be creepy.” Consumers have multiple touchpoints today, from phone numbers to emails (often several), and they know how to clear cookies from web browsers. The best method is to get them to opt in to allow the connecting of activities, but the challenge will be to make that worthwhile over the long run. Consumers are fully aware that their data is being gathered and analyzed, but they also expect real value in return.
This might ruffle some feathers, but retailers don’t care enough about this (hugely important) topic. Doing this merely for “improved customer satisfaction” is a weak rationale that ends up being treated as a cost to be minimized as opposed to a genuine investment. Aligning customer data at a granular level should be as vital to retailers as are their accounting compliance issues: if they viewed this issue with similar importance (as they should), then this conversation would be way different.
Of course the related (and larger) problem is that few retailers are in a position to effectively leverage better data about their customers. Let’s first motivate them to see the benefits, and then the data systems will naturally improve.
Who is the shopper? The standards are limiting, making it difficult to determine the identity of customers online, and this is exponentially more difficult offline. The strongest programs are loyalty card-based ones that explicitly identify a customer with a profile and use incentives that drive customers to present their information up front when logging into a site or entering a store. But these are typically incomplete and riddled with flaws as to the action steps that come with knowing who a customer is. The last point is that customer needs are fluid and changing. The real problem here is even if identified, the retailer will have very limited data about the customer motivations and in many cases will get it wrong. They just won’t know where else the customer shopped, offline purchases, etc. Something is still better than nothing. There will always be new customers and returning customers — and just identifying this set is difficult enough, especially in the store when customers are making selections and impacting the sale.
The premise of the entire privacy and personalization debate is wrong. Customers want to be in control of their identity while retailers use every possible digital signature and bread crumb to create profiles and make a best guess at anonymous online identities. Shocking as it may seem, a shopper may not want to be identified while exploring gifts for a loved one because he or she doesn’t want to keep getting future offers for a personally useless baby stroller or a table saw (and all the associated products that algorithms will forever invoke).
The crux of the matter is someone else (retailer) wants to predict what you want before you actually realize it; while a consumer wants to have control and make choices that satisfy their needs. The solution is for a consumer-based approach to event-specific identity sharing triggered by the consumer to a select number of retailers. It turns the “sale” on its head, yet has the potential to create strong loyalty and brand affinity.
This may sound like an unreasonable fantasy or a bad dream as it’s completely disruptive to the status quo, but once consumers experience that level of satisfaction, freedom, and power they’ll never go back. Just remember what George Bernard Shaw said: “… progress depends on the unreasonable man.”
This should be nothing less than a sledgehammer-to-the-head-wake-up-call for retailers. It is inexcusable as we head into 2020 that this is still lagging at most retailers. There are straightforward technologies to help ensure a seamless shopper relationship, and those retailers that are still struggling need to investigate the tools available today and get this done. Now.
Identity resolution has been treated as an IT process instead of a business driver. But this is changing.
1. Solutions have been too narrow in scope because (a) it historically started out as a solution to the ad targeting problem, and (b) pulling & assembling data from disparate data silos is expensive and slow.
2. And solutions for identity were treated as a silo separated from how brands want to interact with their consumer — marketing thinks of identity as an IT tool — IT often tries to solve for identity without connecting to business initiatives.
3. CDPs (full disclosure: I work for Amperity) are finally converging on a solution that meets the needs of IT, analytics, and marketing to resolve disparate customer records into a single, accurate profile, with stable ID, unlock new customer insights and predictive models to grow CLV, and allowing marketers to activate that profile anywhere a consumer interacts with the brand as they move across channels.