Building personalized customer experiences is often in contrast to respecting data privacy, a challenge that many CMOs are grappling with.
Sixty percent of marketing leaders said that collecting first-party customer data while offering customers a value exchange and privacy will become more challenging in 2023, according to a survey by Gartner.
The study, which includes feedback from almost 400 marketers, found that 85% of marketers have implemented a formal policy to manage customer data, but privacy remains an ongoing challenge.
“First-party customer data and privacy stakes have never been higher for brands, and they are only going to increase – this is because the importance and business value delivered from first-party customer data continues to grow,” wrote Ant Duffin, Senior Director Analyst at Gartner Marketing, in a blog post. “As this data becomes more challenging to collect, marketers must adapt by leveraging new sources of data to fuel personalization and build deep customer relationships.”
Despite the challenges, marketers continue to embrace personalization with 42% of marketers revealing that they employ one-to-one personalized messages to customers.
However, the report did reveal that marketers are empowering consumers. Some 78% of marketing leaders surveyed said they allow customers to manage their own data and 82% said they are prioritizing first-party data to create value for customers.
“Almost a third of survey respondents said they have abandoned an agency or channel partner over the last year due to customer trust or privacy concerns, highlighting the gravity of this issue,” said Duffin.
Focusing on first-party data can benefit marketers, as more than half of marketers who strongly prioritize how first-party data is used said they are exceeding customer retention expectations.
The report also found that almost half of companies with 11 or more marketing channels increased their first-party customer data collection, compared with about 25% of those with 10 or fewer channels. Organizations with more channels are also more likely to be driving growth through new experiences and service channels.
