With Information, Less Is More

Marketers have developed an addiction to gathering information. For many years, they have been taught by some of the country’s finest business schools to “learn everything you can about your customer.”

Ostensibly, the Internet made this holy grail of information finally attainable. For the first time, marketers can receive data on their customers in real time via the Internet. This open forum, created by the ease of the Internet, often alienates the customer by asking superfluous questions. A marketer’s ability to gather infinite facts and opinions directly from the buyer, without the need for a highbrow research company or costly focus group facilitator, is a dream come true.

As one might expect, many of these information-hungry marketers have shown as much restraint as a kid in a candy store.

They Don’t Always Buy

The public’s increasing concerns about privacy violations should be important to the marketer. While 34 percent of Internet users purchase online, 56 percent of browsers do not buy online because of their concerns about privacy, according to Jupiter Communications, New York. Despite the attention to e-commerce, only 14.2 percent of the U.S. population regularly purchases anything online, and only 42 percent of the population has been online at all. Sellers are desperately trying to encourage e-commerce via aggressive awareness drives, Super Bowl commercials, coupons and catalogs.

Consumers’ privacy concerns are certainly valid. Even the savviest and most established Internet marketers make mistakes. One of our employees logged on to Gap.com and discovered a page that revealed the name and phone number of one of its customers, a woman who lived in Florida. Fortunately, the information was as innocuous as a listing in the white pages, but it illustrates the serious problem of privacy.

Marketers’ collection of excessive information not only poses unnecessary privacy risks, but also inhibits sales. When discussing the strategic use and collection of information, less is more.

It’s About Selling

A surprising piece of the privacy debate is that, in many cases, the information that violates and angers potential customers is not even used by the marketers to help sell more goods and services. Given the ability to suddenly gather infinite consumer data quickly and cheaply, many marketers gather information without a strategic game plan.

What was the marketer ever going to do with the buyer’s three phone numbers? The lesson is simple: When collecting consumer data, marketers should keep in mind that by asking less, they can get more customers to buy.

Tough Love

Fighting an addiction is tough. It takes enormous discipline, long-term thinking and a few simple rules:

• Marketers should never ask a customer for any information without knowing exactly how they will use it to help sell more goods and services to a customer. Marketers need to aggregate useful data and eliminate nonessential questions in order to keep the customer on track to buy.

• Marketers should think long and hard about when these questions are asked. Some e-commerce sites begin their personal inquiries (age, income, address, etc.) as soon as the customer downloads the first page; as a result, the frustrated shopper often abandons the site before completing the transaction. How would you react if, after waiting in line at the Safeway to buy your groceries on Saturday morning, the checkout clerk handed you a questionnaire to fill out before he would ring up your purchase? Even worse, imagine someone handing you a quiz on your way into the store. Would you do it?

• Keep it fast. Remember that people use the Web because it can be faster and more convenient than other shopping channels. By asking fewer questions, you not only respect the customer’s right to privacy, but also decrease the number of clicks required to complete a sale.

Recent developments show that companies are taking notice of the privacy issue, and as a result, change is in the air. Microsoft’s Expedia unit competes with Sabre’s Travelocity. Expedia used to require its users to provide a great deal of information prior to accessing its travel schedules and making purchases. Its competitor, Travelocity, did not require these barriers to sales. From consumers’ perspective, it was easier and faster to use the Travelocity services. Realizing that its data collection was interfering with its ability to sell goods and services, Expedia stopped asking so many questions.

Customers First: Be Good Salespeople

Know your customers’ wants, and act accordingly. Effective sales are based on strong customer relations. By honoring your customers’ privacy, you will sell more, build brand loyalty, and create e-commerce sites that are built to last.

Customers are not afraid to share information if they feel the questions are warranted. In the end, the “less is more” approach is advantageous for both sides. E-commerce shoppers will enjoy an expeditious, hassle-free online experience, and e-tailers will increase profitability.

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