How can big data increase customer trust?
The potential for big data analytics to increase understanding of your customers is clear, but can it also make them happier and more loyal?
Know your customer
Around the world, consumers are becoming increasingly sophisticated at researching their purchases, and their expectations are ever more demanding. To meet their needs, you need to understand what they want — even as their wants continue to shift and evolve. By giving customers exactly what they want, organizations can create a strong bond of trust and a durable competitive barrier.
But traditional analytical approaches are retrospective — they may help you better understand what your customers wanted, but they may not help predict their future needs.
This is why leading organizations are starting to leverage real-time big data and analytics to move from a reactive to a predictive stance — knowing what customers want even before they do — and combining this with increasing data-driven personalization.
Where is trust lost?
One of the challenges for organizations trying to improve their customer relations is understanding where trust is lost. This can be difficult given the complexity of how value is created and delivered. Leveraging big data insights can illuminate where trust is being eroded in the customer experience, but only 38% of executives strongly agree they have this ability.
Improving the customer experience requires collaboration across many different business units, which is why it can be so difficult to know where trust is eroded. Big data analytics enables leaders to discover which interconnecting value creators within their organizations need to better collaborate to improve customer experiences and increase trust.
Personalization builds trust
Personalization is seen by many in the business world as the next big marketing trend. When powered with big data analytics, product personalization can create greater value for customers — and often at very little extra cost.
Better yet, advanced real-time analytics can quickly recognize patterns, and immediately and automatically tailor the customer experience — the concept at the heart of the internet of things. Intelligent use of data can build trust and loyalty by offering more personalized and relevant experiences that customers truly value.
Despite the great benefits of personalization, many organizations are failing to seize this promising opportunity. Only 52% of organizations offer relevant or personalized promotions during customer interactions, while 37% of executives lack the capability to use analytics to reach customers with tailored communications.
There is also an abundance of data not being fully harnessed. Although 69% of executives recognize the benefits and are increasing their efforts to personalize their customers’ experience, 41% of executives are not yet using advanced analytics to analyze customer behavior and offers.
Security is paramount
While big data analysis of customer information can increase trust, organizations must do their upmost to protect personal data against breaches. With cyber attacks on the rise and millions of customer profiles regularly being exposed, people are increasingly weary of sharing personal information with organizations.
Big data can become a dangerous liability should criminals breach an organization’s cybersecurity architecture and steal customer information. If customers withdraw their consent to use their data to offer personalized experiences because of a lack of trust in cybersecurity, entire business models could be destroyed. If denied this privilege, organizations will be unable to use big data to craft a competitive advantage in an age of disruption — while the economic and consumer benefits promised by the internet of things could be wiped out at a stroke.
As with any new technology, there are risks as well as opportunities to data-driven personalization. To win customers’ trust, focusing on mitigating those risks is a vital first step. Win trust in your security, and the potential benefits are immense.