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For years, businesses have collected information about their customers, but most do not implement a CRM or retention program.  Plus, many do not promote individual products or services to specific customers, instead relying on “blanket” communications channels

Today, as companies begin to employ customer data in new ways, companies found they can retain customers, cross-sell and upsell much more effectively.

Yet, what is the impact of these types of programs in terms of customer privacy?

A customer of a retail giant explored products online related to pregnancy. The customer did not tell the merchant she was pregnant, but her searches for baby clothing, vitamins and other items indicated she was expecting a child.  The retailer used proactive, predictive marketing to send targeted messages to this customer.  The messages clearly focused on the customer’s pregnancy.  For whatever reason, the customer’s husband was unaware of the pregnancy, but happened to read the email message from the retailer.  He was not impressed that the retailer knew that his wife was pregnant when he did not.  The result was a lawsuit that was settled out of court.  Whether the retailer had the right agreements with the customer or followed the proper legal constraints is unimportant.  They received a black eye in the media and made a cash settlement.  The question is, “is it worth it” in terms of these instances to use predictive marketing.

Business advertisers are beginning to use “privacy violation” as a completive selling point.  One of the largest search engine companies in the world scans all of its customer email accounts and targets ads to that customer based on key words.  This company’s primary competitor then used this information against the search engine in their advertising.  In essence, they said “we don’t spy on you and they do.”  So, predictive marketing can be viewed as a negative.

Over the years, we expanded the scope of the “CRM” model and applied it to a variety of business types.  From retail banking to heavy industry, the concepts have always produced positive results

We built 4Cast™ - which is our branded predictive marketing model on the premise that real and implied customer behavior is the best predictor of future behavior.  In addition, we implement sophisticated triggers and thresholds as well as the quantitative results of more than 35 years of real-world behavioral research, tracking and trending data.

The results are clear.  With predictive marketing we will lower CSR Costs (and any other human touch costs), increase account retention, increase cross-selling closing rates and increase up-selling closing rates.

In addition to achieving positive marketing results, predictive marketing also can improve the customer experience.  The company “knows the customer” and can more easily deliver the proper products and services.  Portions of the customer service model also can be modified to add more proactive contacts, and positive customer service touch points.

Yet, consumer sentiment is currently against any form of tracking or profiling.  While they may not recognize that this has been going on for decades, they are becoming more vocally negative about “intrusion” into their lives.

As an industry, should we promote the positive customer service aspects of predictive marketing to win over the consumer opposition?

Does predictive marketing sever the bond of trust between company and customer – and therefore should be avoided at all costs?

In the coming years, we will see the true impact of predictive marketing.  While it is highly effective, it may not be worth the damage it can cause.

Your thoughts?

 

Posted by David Anderson
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