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When Relationship Marketing Becomes Prickly

Thursday, October 8, 2015

Grönroos is a surname that you may or may not have heard of, but you will undoubtedly be familiar with his theory – the theory of relationship marketing.  In today’s marketing environment, Grönroos is more relevant than ever as relationship marketing is at the heart of what a brand does, particularly online. However, as with any relationship, there are courtship norms that must be followed or else, frankly, it just gets weird. Digital courtship is no different and brands must engage with their audience by walking a fine line between personalisation and the “creep factor”. We all know that creepy feeling, when a brand knows just a little too much about us and we feel a bit unsettled.

 

 

Marketing is a continuous relationship

 

Firstly, it’s important to understand the important contribution that Christian Grönroos, the Finnish academic, made to developing a service quality model. Although his exploration concerning the relationship between service and quality predated wide use of the Internet, he laid forth the idea that the relationship marketing develops with an audience requires on-going maintenance and the reward is repeated purchases  (Grönroos, 1980). Marketing is continuous in nature (Grönroos, 1984) as is the relationship that a brand will form with its clientele. Provided that the relationship is well maintained, this affinity should endure over time.

 

This theory of forming a relationship between consumer and brand was ground-breaking at the time, but is now common practice in the age of big data and digital marketing. By the very nature of living in an always-on environment, there is not only an acceptance, but also an expectation that a brand should understand their consumer and interact with them in a meaningful way. But this contract is two sided, most consumers generally accept the use of their data if it is intended to benignly improve their online experience and their relationship with a brand.

 

 

Personalisation drives courtship to the next level

 

Personalisation is a natural extension of the relationship-marketing paradigm. According to an Accenture Personalisation Survey conducted this past Spring, US consumers welcome personalisation in the following online situations:

  • - Website optimised by device (desktop, tablet, mobile) (64% responded favourably)

  • - Promotional offers for items the customer is strongly considering and an intuitive website for browsing before purchase (59%)

  • - Price comparison capabilities (59%)

According to the survey, almost half (48%) are receptive to the idea of receiving reminders to re-order items that may have run out. As it is relevant and is based on intent, it is not SPAM in the eyes of the consumer.

 

And Accenture isn’t the only organisation tuning in on what consumers will allow. According to a recent Global Loyalty Lens report produced by analytics company Aimia, more than half (55%) of the 20,000 consumers surveyed said they would share their personal information to get better offers and rewards. They found that more than 80% of consumers in the 11 markets they studied were open to sharing personal information such as their names, email addresses and nationalities with brands. Additionally, 70% will share their dates of birth, hobbies and occupations too.

 

 

When the situation turns creepy

 

As with any healthy relationship, there is a give and a take and consumers are expecting the brand to use their information in a meaningful way. The situation breaks down if marketing gets too personal in an irrelevant way, it just gets creepy.

 

Again, citing the Accenture Personalisation Survey, only 20% of US consumers want retailers to know their current location and a mere 14% want to share their browsing history.

 

Consumers don’t like retailers to get too personal, there is a line that a brand can cross. Referring to the Accenture Personalisation Survey, the following activities were frowned upon by consumers:

  • - Retailers suggesting not to buy items online outside their budget

  • - Mass retailers and grocery stores advising them not to buy items outside of their dietary restrictions

  • - Store associates who can provide recommendations based upon their family health issues

  • - Retailers giving them feedback from their friends online

Why does this happen? The data-driven marketing company Teradata describes it well (and uses humour too) in their video about “Avoiding the Creep Factor”. According to Teradata, brands must not confuse “context” with “relevance”. In their example, the consumer conducted research for a school project, which had nothing to do with intent to buy. The brand then took this data and began targeting the consumer with irrelevant products based on that school project research. When the context doesn’t match the customer needs, the relationship break down.

 

As a best practice, brands should be clear about how they use personal data. Just because a company can do it, doesn’t mean that they should.

 

In summary, access to wider data requires more restraint and a greater sense of responsibility by organisations. Companies must decide whether they are providing their consumers with a value rich experience or whether they are just overusing personal data. Relationships can be strengthened or broken on this factor. 

 

Greta Paa-Kerner is a digital strategy consultant and a senior lecturer at Bucks Business School. Visit her website at www.ganduxer.com for more details.

 

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