It’s official, inflation has reached 9%, and prices are rising at the highest rate in four decades. Whether you agree with the Bank of England Governor’s remarks about apocalyptic food prices, everything has become a bit more expensive.
At the same time, we have the issue of fiscal drag because personal allowances are not rising in line with inflation, and tax rates are increasing. People have less disposable income, and they are reining in their spending wherever possible. Subscriptions have been one of the first to go, so much so that Netflix has just axed 150 jobs. Subscriptions have been one of the first to go, so much so that Netflix has just axed 150 jobs. Others will soon follow. We can get by without commercial streaming services, and BBC iPlayer will likely see a resurgence in interest, but mobile phones are a different story. They are such an indispensable part of our lives that we need them to function. But that doesn’t mean consumers won’t look for better value options. If budgets are squeezed, the higher value tariffs, the ones offering all-you-can-eat data plans and more, are likely to see some churn. Whilst at the lower price points, the volume end of the market, there will likely be a shake up in the split between pre and post-pay subscribers. It is pretty inevitable.
The upshot is, consumer behaviour is about to change, and all consumer businesses need to predict and identify these changes as early as possible to head off risk and maximise any upside from this unfortunate situation. When consumers switch plans, it inevitably involves looking at competitor options too, so what can operators do to pre-empt or counter this switching?
At a time when inflation around the globe is rising so rapidly, advertisers and brand owners should review their approaches to marketing. They need to find ways to make their products and services more relevant and financially justifiable. They need to increase brand loyalty, improve marketing ROI and get better campaign conversion rates. Personalisation can help achieve this. We are not advocating that telcos should find a way to make cash-strapped consumers continue spending at all costs, but that they show empathy and in doing so, make themselves more relevant to those that might be struggling.
There has been an aura around marketing personalisation for many years that it is somehow intrusive or Big Brother-like. As our research* shows, the reality is different, and telcos should be putting this to their advantage with more tailored, relevant and, very importantly, empathic communication. Consumers say a personal approach makes them feel more loyal to their network operator and that they find it helpful.
Intent HQ surveyed 500 consumers* across all demographic groups to find out what they thought about the personalised marketing coming from their network operators. 75% said getting more personalized, relevant marketing and customer service made them happy and more likely to show loyalty towards their phone provider.
When asked if they had any concerns about using the data to personalize marketing, only 24% said they found it ‘creepy and intrusive’, and 9% had no concerns whatsoever.
74% said they were happy for customer data to be used for personalised marketing purposes, and just 18% said they would not provide consent.
Consumers were also willing to accept marketers using weblog data (sourced from the websites they routinely browse) to pinpoint their preferences and preferred this to marketers using bought-in 3rd party data. Interestingly consumers over 45 years old were more comfortable with the use of weblog data versus consumers aged 44 or below.
This finding is very significant, because by accessing weblogs, telcos could identify who among their consumer base may be seeking a better value tariff and be more proactive about offering them better value alternatives. It is preferable to losing the business completely.
Clearly, consumer attitudes towards personalised marketing have matured, and brands need to take swift action to avoid losing customers due to the ongoing cost of living squeeze. Using personalization could be the difference between success and failure when the impact of inflation starts to bite.
KEY STEPS TO AVOID CROSSING THE PERSONALISATION LINE
So, what can brands do to ensure they’re staying on the right side of this line?
1. Optimize your strategy to deliver the right amount of personalization for each customer. This is where having a unified and complete picture of who they are and what they are likely to respond to – both positively and negatively – is essential.
2. Remember, it’s not what you know but how you use it – context is critical. If you are going to use personal data to assist in the targeting of messages, think about what customers are likely to be more tolerant of you using and when and how you do it.
3. Product preferences, communication preferences, and basic demographic details are all information consumers are usually happy for you to use, whereas things like behaviour, location, and web browsing data, although potentially more powerful for increasing relevance, require more granular consent levels.
4. Understand that customer personalization is effectively customer relevance. This can mean different things to different people, and you need to identify the optimal degree of personalization for each customer communication, not just the highest possible.
5. Ultimately, remember that this is your customers’ data, not your data. Treating it with respect, with levels of privacy baked in, and with the customer’s interest at heart will produce a win-win for customers and telco alike.
Author: Frederik Shroeder is Chief Revenue Officer at Intent HQ
* Intent HQ surveyed 500 consumers across the US, UK and Europe, March 2022
About Intent HQ
Intent HQ was founded with a clear purpose, to help our clients – big brand owners including some of the world’s largest telcos – to create more relevant and sustainable customer interactions.
We do this by minimising wasted marketing. Marketing that’s poorly targeted and frankly irrelevant to the recipient. There’s a lot of it about. At Intent HQ, our approach is to use advanced machine learning and AI to develop what we call ‘true personalization’ marketing.
Intent HQ’s Customer AI platform technology draws on detailed behavioural insights gathered from a diverse array of data sets, and we help clients to connect with customers at the deepest possible levels. Our ‘true personalization’ approach means brand owners – like telcos, e-commerce companies, retailers, travel, entertainment, and hospitality businesses – can build stronger, higher spending customer relationships, boost brand loyalty and identify new ways to monetize their data.
Our business mantra is to help clients deliver ‘three times ROI’ using Intent HQ products, and our track record of helping telcos increase success speaks for itself. We enable them to commercialize a key strategic asset – customer behavioural data – in a completely privacy-sensitive and legislatively compliant way. It’s a win for the dataset owner and a win for the consumer, who is treated like an individual and avoids being targeted with irrelevant messages.
Today Intent HQ is a growing global team of 100 data scientists, digital marketers, CRM experts, and psychologists operating in London, New York, and Barcelona. We’re starting to be recognised for our outstanding results and have just been ranked one of Europe’s fastest-growing companies inside the FT 1000 ranking.