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Personalization, Privacy and the Creep Factor

Posted by Julia Walker

Wed, Jul 25, 2018

online shopping

You’ve seen it before: a pair of shoes that follow you all the way from Zappos.com to Facebook, or even creepier, when you have a conversation about Patagonia and suddenly, Instagram serves you an ad for their latest down jacket. Today’s marketers don’t have to guess where to place their ads anymore. Instead, they track online behavior to tailor ads, offers, products, and experiences to the specific consumer.

Leveraging online consumer behavioral data for personalization is now a standard marketing strategy, but what are the implications for brands and consumers?

Personalization drives consumer behavior. In fact, 80% of people are more likely to do business with a company if it offers them a personalized experience. Amazon revolutionized personalization when they rolled out their product recommendation algorithm—a feature some attribute to their huge sales increase (29% in the second fiscal quarter) in 2012. And it’s only advanced since then. With the help of AI and big data, brands can deliver highly custom experiences to consumers. Now, personalization spans devices, following you from your tablet to your desktop, and can recommend your next TV binge or anticipate an unmet need.

Personalization can also inspire loyalty, which means a greater customer lifetime value and possible advocacy. With forty-four percent of consumers saying they will likely make additional purchases after a personalized shopping experience, this is a tremendous opportunity for brands to break through the clutter with tailored messaging and offers.

But is there such thing as too much personalization? As brands continue to collect data to better understand and serve their customers, where does the line between service and invasion of privacy begin to blur? InMoment's 2018 CX Trends Report found that 75% of consumers find most forms of personalization at least somewhat “creepy”. And while half of consumers admitted they’d still shop with the brand after a creepy experience, almost a quarter reported it would drive them to a competitor.

The stakes are high for companies collecting customer data: 70% of consumers would stop doing business with a company that experienced a data breach. And this data is exactly what enables brands to personalize their offerings.

So, we’ll continue to see this tension play out across industries—while consumers continue to expect more personalization, brands must deliver tailored experiences without risking the creep factor.

Julia Walker is a Project Manager at CMB and an avid online shopper whose decisions are often influenced by algorithm recommendations.

Topics: data privacy, ecommerce, Artificial Intelligence, retail research

Why We Still Use Facebook Despite Privacy Concerns

Posted by Kate Zilla-Ba

Wed, May 23, 2018

facebook (cropped)

The kids are on Insta and Snapchat, and even as those are a bit dated at this point, the question for Facebook seems to be how to stay relevant. But recent revelations about how Facebook had been using customer data have led to less of a backlash than might be expected. Why?

Complacency.

We humans tend to normalize things. What was scandalous the first time it came around, is less so over time, until we just expect it.

Why are we so complacent about Facebook? Well, for starters, we live on it. How many posts are things the poster could google, but instead, feels the need to ask the town group—when is the next trash pickup, or how do they get rid of the dead squirrel in front of their house, or… the list goes on. Facebook has become part of nearly 1.5 billion peoples’ daily lives around the world, suggesting most people have become okay (complacent) about how social media might be collecting, sharing and using our information.

And this shouldn’t be that surprising. Back in 2010 (and likely earlier) Mark Zuckerberg was clear that he felt privacy was no longer a social norm, saying, “People have gotten really comfortable not only sharing more information and different kinds, but more openly and with more people.”

We’ve come to expect less and less privacy, which is directly associated with the continued growth of Facebook usage—despite what happened with Cambridge Analytica.

We still care about privacy. Just not as much. Maybe if what happened with Cambridge Analytica felt individually targeted and less of a mass invasion of privacy, we’d care more. But it happened to a lot us, so what’s a user to do? Keep posting and sharing seems to be the net answer. Probably even in the EU, where strong consumer concerns about privacy has the EU setting standards for the world with GDPR.

Understanding consumers' psychology, such as Facebook users, is core to market research. What are they seeking to achieve? How do they express that in attitudes and actions? What barriers exist and what catalysts motivate them?

In addition to the normalization of information-sharing, users continue to use Facebook because of the functional, emotional, and identity benefits the brand provides. Facebook is a space where users can feel connected to other people (social identity), can find and share content that animates them (emotion) and is a convenient tool for things like selling your couch or getting recommendations for a reliable plumber (functional). Facebook has done an incredible job providing the right balance of these three benefits, which we know are key drivers of customer loyalty and advocacy.

Knowing all we know, we still use Facebook. We’ve normalized making public details about our lives we would’ve considered “private” 10 years ago—and that doesn’t look like it’s going to change anytime soon. For most of us, the benefits Facebook provides outweigh privacy concerns.

Will you share this when I post it? Like it? Love it? (No sad faces please!)

Kate is a FB user who loves to keep up with old friends and family but rarely posts. Her research background helps keep her eyes wide open (or so she thinks), to the privacy she has given away.

Topics: data privacy, social media, consumer psychology, big data, consumer insights