“CXM = The art and science of coaxing lifetime loyalty from daily transactions.” ― Steve Curtin
I have never seen a more perfect storm situation than the one marketers are facing today.
On one side we have the drastic change in consumer behavior to a much more digital engagement model, one that requires marketers to recognize customers and understand their behavior across digital channels and devices more expansively than ever before. But those changes are coming alongside a rising tide of digital privacy announcements that seemingly impede the marketer’s ability to collect and use the very data they need to understand digital behavior and tune reactions in the new engagement model.
The Pandemic’s Impact on Customer Engagement Models
Let’s look at the engagement model first. The pandemic so drastically changed consumer behavior that many of us were caught off-guard. McKinsey called it the quickening and said it was no wonder companies felt like they had whiplash — because we experienced 10 years of digital activity growth in three months. Deloitte calls it bespoke for billions, positing that the rapid move to digital has caused companies to recognize that customer experience must strike a balance between making traditional physical human experiences more digital, and digital experiences more physical. Futurum Research says we have entered into an entirely new engagement model where experiences are increasingly digitally infused — even when physical. It labels the change a hybrid digital/physical method of interaction.
This new method of engagement by itself is hard enough to deal with because it puts lots of pressure on existing martech infrastructures. There is an immediacy to digital communications because in this environment speed counts. We have to detect digital activity and react in real time. And as digital interaction becomes predominate, it moves real-time activity from an occasional requirement for specialized situations into a more universal need.
The environment also requires a higher degree of personalization, primarily because digital has caused what one of our Accenture partners calls a “paucity of patience” in people. Mobile and social environments are inherently and intensely personal. If you send irrelevant or untimely communications via those mechanisms, customers can tune you right out — they can delete the app or turn off push notifications, they can block SMS or calls and they can tell platforms like Facebook that they don’t want to see your ads anymore. The consequences are both real and hard to recover from.
Related Article: Bringing the ‘Customer’ Back Into Customer Experience
Privacy Rears Its Head (Again)
Marketers who believed they had dodged a bullet back in 2018 with the changes they introduced to deal with the GDPR have thought twice about their complacency over the last few years, especially when it comes to cookies. Cookies have been an important part of the marketer’s digital toolkit for years as brands use them to track website visitors and collect data that helps to understand what content people look at on owned and third-party sites, as well as narrowing focus for targeted online advertising.
Cookies started to come under fire when Firefox allowed users to block tracking cookies in 2018. Safari started blocking cross-site cookies by default in early 2020. Google, which tracks roughly 90% of all search engine users, shocked the landscape even more when it announced that not only would it phase out third-party cookies from Chrome but also that it wouldn’t build or support any browser technology designed to perpetuate individual-level data tracking.
To highlight how serious is is about cookies, Google released this statement, “We realize this means other providers may offer a level of user identity for ad tracking across the web that we will not — like PII graphs based on people’s email addresses. We don’t believe these solutions will meet rising consumer expectations for privacy, nor will they stand up to rapidly evolving regulatory restrictions, and therefore aren’t a sustainable long-term investment. Instead, our web products will be powered by privacy-preserving APIs which prevent individual tracking while still delivering results for advertisers and publishers.”
Data Management Platforms (DMPs) and other data vendors that harvest information from these cookies and build up profiles, create audience segments, target advertisements, or sell the profiles to marketers will be significantly impacted as these cookies phase out. And the marketers that rely on them will lose their “short-cut” to targeted advertising and personalization just at the time when they need it the most: to connect with digital customers in ways that keep those customers tuned-in and interested in keeping the lines of communication open.
Related Article: Google Gave Us a Reprieve on Cookies. My Advice? Don’t Take It
Pining for Personalization
Both Deloitte and Futurum recognize that the emerging trend of hybrid digital/physical experiences is here to stay — and with it, the need for hyper-personalized experiences is not going away. If anything it will increase in the coming years.
Deloitte says that consumers are becoming less satisfied with distinct physical or digital experiences and instead want the best of both: personalized interactions combined with the convenience of digital. They expect to see companies embrace the bespoke for billions trend by “exploring ways to use human-centered design and digital technology to create personalized, digitally enriched interactions at scale.”
Futurum found that 76% of marketers also believe that consumers will stick with the hybrid digital/physical engagement model. Consequently, 66% are accelerating their tracking of online behaviors (through first-party cookies placed on owned properties) and most are focusing on providing highly personalized communications through real-time data collection, analysis and contextual responses.
As marketers search for ways to navigate the perfect storm, one thing is clear — they will have to find ways maintain (and increase) the personalization that customers have come to expect. Expect to see marketers digging deep with increasing emphasis on first-party data, AI and ML driven communications, and full journey optimization to get personalization right in 2022.
Lisa Loftis is a thought leader on the SAS Best Practices team, where she focuses on customer intelligence, customer experience management and digital marketing. She is co-author of the book, Building the Customer Centric Enterprise.