Digital marketing is no longer a success story for luxury brands and services. With low click-through and conversion rates from online ads, they need a way to unlock deep and meaningful customer relationships.
According to the Luxury Institute, which recently published a 10-step white paper on how brands can achieve advanced personalisation, the key is consent-based access models.
The paper’s executive summary states: “In the post pandemic personal data economy, a brand’s privileged access to relevant, rich, and real-time customer data will be the major driver of economic and competitive advantage.”
Digi.me’s executive chairman and founder Julian Ranger recently took part in a webinar with 11-year Google veteran and GLIAnet founder Richard Whitt and Luxury Institute CEO Milton Pedraza to explore how brands can create real breakthrough business models after the pandemic by gaining privileged access to rich client data in order to achieve advanced personalisation and deep loyalty.
Julian said: “In the new world any data is available from the individual but then the value exchange becomes the key aspect – what value is provided to me in exchange for the data I’m sharing, and that value is a service, convenience or reward.
“So for me, personally, enabling a new ethical world of an advanced data sharing is a dream really, we can do everything we want to do ethically and – this is really key – profitably for us as businesses and for the individual.”
Step one of The Highly Profitable Journey from Privileged Access to Advanced Personalization, is identify the most valuable customer data – and Julian made the point that businesses need to open up their minds as “almost any data is available now’ direct from individuals and whether they’ll share it depends on the value exchange. He also emphasised the importance of creating a “ladder of trust” and starting simple.
Richard said the value exchange “literally explodes” when data is added together and shared.
Step two is installing the legal and ethical framework for data sharing, while step three is establishing the technology framework for data sharing. Here, Julian pointed out the importance of choosing a data facilitator, such as digi.me, that helps individuals get their data and share it, in a fully ethical way, as well as covering off many legal steps such as consent and data tracing auditability.
Step four is powering up the analytical AI engine, and Milton said that the cost of using algorithms to make millions of rapid predictions and recommendations in real time is plummeting to zero. Julian also pointed out that businesses have got to extract understanding from the data to drive their value exchange.
Step five, once you have the previous elements in place, is turbo-charging the continuous customer value innovation platform, and step six is implementing a new customer communication strategy. Julian said the key insight is ‘start’ – learn in the field, instead of overanalysing on paper – also noting that the response will be different depending on each individual’s history with the brand.
Steps one to six, the panel said, would normally take three or four months, starting simple and powerfully. Step seven, once these are complete, is pilot testing and learning experiments. Julian recommended trialling apps quickly with subsections of the community to learn, while Richard recommended treating customers as partners, not the object, in this experimentation.
Step eight is reorganizing teams for advanced personalization and Julian stressed here that the “fleet of foot will win” as “data is now a ubiquitous capability” so the key thing for businesses is to do whatever they need to leverage it.
Step nine is scale up and measure what works, and Milton said with rich access to data, AI and reorganising, businesses can achieve many, many more clients through economies of scale, as well as economies of scope improving share of wallet or client portfolios.
Julian added: “I think in this new world you will actually be able to measure the real parameters that add to real value for you as a business and me as an individual.”
Step 10 is about innovating an iterative testing and learning customer experience culture and processes, with the intent of building true client relationships.
Milton concluded by speaking of the dangers of brands looking for Industrial Age solutions when the world has really become far more digital, concluding: “Post pandemic, luxury brands are going to need new ways to vastly improve performance and in many ways they’re looking in the wrong places.
“The advanced personalisation techniques that we describe in this webinar dramatically reduce the cost of acquiring relevant, rich and real-time data. That’s a real cost saving.”
He said leveraging the plummeting costs of AI, improving customer relationships, dramatically reducing supply chain and inventory costs and the overall increase in sustainability, as well as retention and referral rates, all pointed to a “compelling” economic and ethical use case.