Thursday 23rd May 2019, 11:45am
Twelve months in, GDPR has had an unexpected effect on marketing performance
Who can forget last year, with its scorching summer, Royal wedding, World Cup football tournament – and all those GDPR requests from (so it seemed) every website you’ve ever interacted with.
One year on from the replacement of the old UK Data Protection Act by the General Data Protection Regulation, what’s the verdict? Has the marketer’s nightmare expectation of a mass exodus of customers actually come to pass?
Not really. In fact, rather like the Y2K Millennium Bug (anyone remember that?), GDPR has passed through the public consciousness with all the impact of a small pebble tossed into a village pond. And the signs are that the post-GDPR data pond is a lot healthier than it was before that pebble was thrown in.
The May 2018 introduction of GDPR was designed to harmonise data privacy laws across Europe and to give greater protection and better data access rights to individuals. The keenness of organisations to toe the new line on information gathering and customer opt-in renewals was fuelled in part by a new fines regime, which explains all those emails you suddenly received from long-forgotten businesses.
Under the new rules, individuals’ consents have to be ‘freely given on an informed, specific, and unambiguous basis’. Presented with such a golden opportunity to exercise control, surely most consumers would opt out? Marketing chatrooms were afire with glum predictions of a dropout rate of between 50 and 90 percent. Marketers were braced for a dramatic change in fortune.
12 months on, however, it turns out that things really aren’t so bad. For many, the pool of contactable customers has certainly shrunk as individuals have exercised their new rights, but that reduction appears to have been mirrored by an increase in marketing effectiveness. GDPR opt-inners have been demonstrating a more engaged and receptive reaction to brand messaging. Data quality has been beating data quantity.
Take home assistance provider HomeServe. They’ve identified a better response to their targeted and more precise communications from consumers who are now actively on-board and more interested in what the company is selling. For HomeServe, this last year has seen a classic ‘double bubble’ hit of better return on investment as well as additional cost savings. Meanwhile, in the wider business environment, the DMA have reported that around three out of four marketers have seen a post-GDPR increase in email opening and click-through rates.
This small miracle hasn't happened without a degree of extra focus on the marketer’s part. A recent survey showed that just over half (51%) of respondents in a post-GDPR world believe it’s now easier to tell companies how they want their data to be used. That sounds like something you could cheerfully announce at the next board meeting until someone asks about the 49% who don’t find the process easier. For example, dumb acceptance of the ‘opt out of everything’ route is nothing more than a sure way to haemorrhage customers.
Surely there’s a smarter way of working? The more enlightened solution is the development of more sophisticated online preference centres which let customers tell you what they want to hear about, and when. This enriches the quality of collected information coming in, and helps to supercharge the personalised, accurate and timely customer communications going out. After all, keeping customers is easier when it’s on the customer’s terms.
The old adage that says keeping a customer always beats winning a customer has never been more relevant. GDPR has helped to create a well-qualified customer cohort who have actively given their permission for you to stay in touch. However, complacency can be the enemy of progress. Businesses need to recognise the effort that’s required to keep their customers. Not only is it six times more expensive to attract a new customer than it is to retain an old one, you’ve also got 14 times the chance of selling to an existing customer than you have to a new one. By offering tailored choices through a well-crafted preference centre, you’re giving back control to the customer and greatly reducing the risk of them making the dreaded red-button choice: ‘unsubscribe from everything’.
Last year, Gareth Southgate gave England fans a long-awaited chance to fall in love with their team. This year, you can give your customers the same chance.