Big Data has been a hot topic in the business world in recent years. Even if consumers aren't quite sure how it all works, they know its purpose: Companies are collecting and using digital data — such as Web search histories, past purchases and geolocation — to make personalized recommendations and market to customers in the most targeted, effective way possible.
Despite growing concerns that government organizations like the National Security Agency may be invading people's privacy, consumers are surprisingly receptive to data mining if it leads to a better online shopping experience. In fact, new research by B2B software review site Software Advice found that 89 percent of global consumers said they would be more likely to choose a retailer that offered personalized discounts.
But marketers, be warned — customers don't want you to use any data you can find on them. While consumers generally approve of companies mining their website search history (55 percent), more than 75 percent are uncomfortable with companies analyzing their social media posts. [For a Great E-Commerce Experience, Make It Personal]
Seth Redmore, vice president of marketing at text and sentiment analysis software Lexalytics, noted that some companies look for keywords related to their industry to identify potential sales leads. For instance, a camera company might monitor consumer posts that contain the word "camera" and further analyze them based on the sentiment or situation.
"If you notice that someone is tweeting that they broke their camera ... that is an excellent time to step in and say, 'Hey, bummer about the camera. How about 20 percent off to replace it?'" Redmore said in a statement.
The problem, however, is that this information was not provided directly to the retailer, and customers may feel that their assumed anonymity on social media (from marketers, at least) has been breached. Victoria Adesoba, marketing research associate for Software Advice, advised companies to carefully walk the line between being helpful and being invasive by only collecting social data from customers who follow them, and avoid anything that appears to be part of a conversation among other users.
To further err on the side of caution, Adesoba said, retailers should encourage users to send them direct messages, post on their wall, tweet them, etc., with questions or comments related to their products.
"It seems more justified to use such data, since it is given to the retailer directly," Adesoba told Business News Daily.
Adesoba offered a few key do's and don'ts for businesses that want to personalize their customers' e-commerce experience the right way:
DO keep demographics in mind when it comes to your customers' online shopping experience. What will appeal to a woman in her early 20s may not appeal to a woman in her early 40s, and vice versa. Retailers will benefit most from a targeted personalization strategy, Adesoba said.
DO base customer incentives on purchase history. Many retailers already do this, but discounts, earned coupons, etc. should be determined by how much money shoppers spend on your site or how frequently they purchase items from your site. Adesoba noted that this is an easy way to maintain customer loyalty, and it makes customers feel special and valued.
DON'T target consumers too aggressively. Retailers run the risk of turning off customers with too many emails, texts, notifications, etc. Adesoba recommended observing consumer responsiveness to your emails as well as their shopping history, and then using this data to customize your outreach.
DON'T fail to deliver on promised perks. You won't make a great impression by going back on a deal, or telling your customers that you maxed out on the number of customers who can redeem a deal or promotion. "That is a quick way to lose customers," Adesoba said.