A common misconception among marketers is that modern customers are happy to share personal information in exchange for special pricing or more targeted and relevant communications. According to a recent study by the University of Pennsylvania’s Annenberg School for Communication, “Marketers are misrepresenting a large majority of Americans by claiming that Americans give out information about themselves as a tradeoff for benefits they receive. Just the opposite, the survey reveals most Americans do not believe that ‘data for discounts’ is a square deal.”
The vast majority of customers surveyed – 91% —disagree with the statement, “If companies give me a discount, it is a fair exchange for them to collect information about me without my knowing.” For example, most customers also don’t approve of companies monitoring their online activities in exchange for free Wi-Fi while at the store.
Striking a Better Balance
Increasingly savvy customers are driving marketers to strike a better balance between their need for data collection and customers’ need for privacy and control. Being more transparent about how they collect and use customer data is a good start, but companies should take it further and ask for explicit consent. Forward thinking companies are adopting a permission-based approach to avoid alienating the very people they want to learn about: their customers.
A Cash-Incentive Program Solution
A cash-incentive program such as Encore Incentive’s RewardsCardPlus offers the permission-based transparency, simplicity, and immediacy that today’s customers are seeking. In addition, cash incentives have proven to be the highest motivator for positively influencing customer behavior and increasing brand loyalty.
The University’s study, The Trade Off Fallacy: How Marketers Are Misrepresenting American Consumers And Opening Them Up to Exploitation, explores the practice of collecting customer data for marketing and research in more depth, and can be downloaded here.