Why do you need a Preference Management and Consent Management Solution?

Preference management enables brands to better centralize, target and segment based on higher quality data, and integrates seamlessly with consent management.
by Usercentrics
Nov 11, 2022
Why do you need a Preference Management and Consent Management Solution?
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Businesses need to comply with ever-expanding data privacy regulations, but they also need to know their customers and provide them with the best possible experience. Fortunately, these needs are not at odds, but we have reached a critical juncture.

 

Customers have greater awareness and concerns about who has their data and how it’s being used. Additionally, how companies collect and use data is changing, in both the legal and technical landscapes. Companies need to take the next step, to center their data and marketing strategy around their customers’ expressed preferences. They also need to achieve data privacy compliance and make full use of customers’ consent preferences.

 

Combining these actions via seamless platform integrations, companies will be able to deliver the best and most personalized customer experiences via sophisticated segmentation and targeting to build trust, increase engagement and drive revenue and growth.

Several data-centric evolutions are in progress, which businesses can either get ahead of and take advantage of now, or be left scrambling to catch up. Third-party data and tracking (e.g. third-party cookies) are being phased out in favor of first-party or zero-party data. Customers are demanding more control over their data and engagement with companies, and also more personalized experiences.

 

Tracking and data collection won’t end when the use of third-party cookies does, however. Companies just need better ways to do it, starting with a move to the use of first-party cookies, or, even better, asking their customers for their preferences and consent to use the information, getting that voluntarily directly from those customers, and using it to more precisely manage all customer data, communication preferences, advertising and more.

 

The movement away from reliance on third-party data is good for companies and customers. It enables better security and data compliance, more control over access to and use of data, and better integration among the platforms that power companies’ marketing operations.

 

Adopting these new approaches and tools for data strategy and customer relationships now is a proactive measure that enables companies to leverage a competitive advantage and exciting new opportunities. The alternative in the near future will be scrambling and risking regulatory penalties and revenue loss while spending far more time and resources to adapt reactively.

 

In good news for companies and customers, the way forward has consent at its core. That will drive more secure, better controlled, and higher quality data; increased revenue and growth; decreased legal risk; improved customer transparency and trust; and stronger long-term brand relationships. All together making preference management and consent management a winning combination.

What is preference management?

Companies learn about their customers across many channels: website and app browsing, ecommerce, forms, ad engagement and more. They also have plenty of communication channels via which they engage customers: postal mail, email, SMS, mobile notifications, chat, etc. All that data about interests and behaviors form a detailed profile of the customer and the basis of their relationship with a company. Or it should, as long as those disparate channels can work together to deliver data and insights cohesively.

 

Companies also can — and should — ask their customers directly. Multi-channel preference collection removes the “middle man” that is usually technology the customer isn’t even aware of. There are clearer benefits to the customer in providing accurate information, and it hands control over the brand relationship to them.

 

How often do they want to be contacted? What topics interest them? Do they want to know when there’s an update relating to a product or service? This is called zero-party data because it is made up of customers’ expressed personal preferences, voluntarily provided. It doesn’t rely on third-party tools to collect it, and doesn’t require inferring customers’ preferences from their behavior. There are no “degrees of separation” between data about the customer and the company that is interested in it. It is consensually provided and is considered the gold standard for quality. If data comes directly from the customer, technologies like tracking cookies aren’t even needed.

 

Of course, to get that data from customers requires a clear, user-friendly interface to request those preferences, and a back end platform that can organize, store and share them with other relevant systems to deliver those personalized experiences.

 

Preference management provides a preference center to manage that data, make the relevant parts of it available to other systems, and perform analysis to enable longer term strategy and planning. Additional tools like consent management are integrated to ensure even more precise control and to help ensure compliance with relevant privacy regulations.

 

On the customer’s side, preference management enables and empowers their choices and sense of control with the brands they engage with. That enables greater trust, higher engagement, increases spending and encourages longer-term brand/customer relationships.

What are preference management tools and how do they work?

Just as a consent management platform collects, stores and shares users’ consent preferences about use of their personal information, a preference management platform collects, stores and shares users’ preference-related personal information. Preference management handles what customer information they want companies to have, and consent management handles how companies can use what they’re given. A preference management solution’s data enables companies to build a robust understanding of their customers, with accurate segmentation across marketing initiatives and systems.

 

A preference management platform simplifies collecting and managing these authoritative user choices. For example, if a customer’s communication preferences are to receive emails weekly rather than daily. If they are interested in new products or sales notifications, but not communications from third-party partners. If they would like to learn more about the topics of travel and food, but not sports. (You can even ask how often they travel or preferred modes and destinations to determine if they’re corporate road warriors or snowbird retirees.)

 

Companies can use this data to enrich existing information (e.g. purchase history) to create a standardized and comprehensive customer profile with a consistent set of customer-provided preferences. This richer data set powers better segmentation and targeting for marketing operations across all channels, impacting top line metrics like conversions and ROI. Over time this drives higher engagement and better experience across the customer journey.

 

There are endless ways that customers are asked to express their preferences, which companies can use to better personalize the experiences their brand delivers. These are all managed via a preference management platform.

Who is a preference management solution for?

Once companies reach a certain maturity, they usually employ a number of sophisticated tools to collect and manage data, especially that of customers. These systems are integrated — customer relationship management, marketing automation, customer data platforms, data warehousing, consent management — but are still separate and none alone provides a fully comprehensive picture of the customer.

 

Companies that need customer data not only to generate revenue, e.g. for ads, but to better serve their customers directly. Companies that want to increase customers’ lifetime value. Companies that want to stay ahead of rapidly changing technologies and regulations, and develop robust systems that integrate seamlessly, and use those investments to grow their business. And perhaps most importantly, companies that value their customers’ privacy, consent and trust, who want to exceed customers’ expectations and don’t just want to do the bare minimum to achieve data compliance. They want to center their data strategy around more secure, better controlled, higher-quality data that enhances marketing performance and builds a competitive advantage. That is who most benefits from a preference management solution.

 

Of course, there would be no preference management without people to provide the preferences, so it is also for customers and users of websites and apps. Anyone who is tired of their data being collected and sold without their permission. Anyone who’s been spammed with irrelevant emails. Anyone who’s had a specific thing they wanted to buy and had a seemingly impossible time finding it. Anyone who’s been bombarded with ads for things they’d never be interested in. Ideally, though, companies don’t just want customers, they want dedicated fans. But fans have to be earned. Managing consent and preferences well is a great step towards that goal.

What are the benefits of preference management software to companies?

The benefits of preference management are wide-ranging, from enriching human relationships to tech integrations.

 

Customers are the most important part of the equation, and preference management helps companies get to know them more personally and take their direct cues about what interests them. When you can provide personalized service, you can ensure that you respect the preferences of all customers, not just the larger segments, with relative ease and minimal additional resource requirements. Not everyone’s into email? No problem.

 

Preference management solutions ensure there is scalable storage for all the data collected over time, the ability to access it and work with it when needed — including integration with additional systems to do so — and that it’s secure. It also enables companies to perform data housekeeping in a more systematic way, including being able to nudge customers, who can then check and update their own data, potentially saving companies a massive amount of manual work and ensuring greater accuracy. Notifying customers when their data has been accessed or updated, even if just by the customer themself, is also a trust-building signal of the company’s security measures.

 

Customers are also more savvy than ever before. They understand that their relationships with brands are primarily transactional, and they’re fine with that. But they also know how much data companies have about them, and they expect it to be used to cater to their preferences in channels, messaging, products, deals, and more. Customers who feel understood and respected and note that the company is crafting experiences for them are more engaged and loyal, especially over time. Brands now have the tools to meet these sophisticated challenges.

 

Customers and brands also have more channels between them than ever before, which is a challenge to ensure relevant communications. It’s also an opportunity to ensure more consistent engagement (no worrying about answering the phone or replying to texts), as well as more precise customization and identification of the highest ROI channels. Whether a customer prefers text, email, in-app notifications or postcards, it can be done well, automated and at scale to keep successful contact rates high.

 

Customizing use of channels also helps with messaging that is time-sensitive… or not. Some things are time-sensitive, and some can wait. Mobile alerts can be great for geo-targeted messaging, for example, but email is often better for when people have more time and focus, like for newsletters or billing information. Using the right timing strategy can also help increase response rates and other engagement.

 

Preference management enables granular profiling within accounts. One account doesn’t always mean one person, but an account for a whole family (like phone plans or streaming services) can still be segmented by user, with preferred contact method, interests, behavior patterns, and more for each. Even primary contacts can be identified to ensure the right messaging goes to the right people who make the purchasing decisions.

 

In addition to having preferences about what they want brands to do for them, customers have preferences about what they want to manage themselves. Preference management helps enable better self-service. Plenty of people would prefer to try to find information or resolve issues themselves before calling customer service, for example. Knowing who and how big this segment is, and ensuring those channels are viable can be important for keeping current customers happy, and can help cut support costs.

 

For companies as a whole, preference management enables far greater centralization and accessibility of data. No more department-specific silos. The whole organization can access and share it (though security and administrative controls are also built in) so preferences can be centralized to a variety of business functionals. This is also valuable for data strategy and privacy compliance, as regulatory requirements and consent preferences can be applied across the full customer profile and all data consistently. In the event of auditing, everything is in one place.

 

Everyone across the company can learn about and understand customers, their interests, their communications preferences and consent choices. This makes growing the business and building long-term customer relationships truly a team effort.

Both preference management solutions and consent management solutions can be easily integrated with companies’ existing tools for websites and apps. They don’t require massive financial or resource investment or reworking of existing systems.

 

When these platforms are developed by a well-established industry leader, they’re designed to be easy to set up and maintain, straightforward to customize to business’ needs and to use every day, and enhances companies’ data strategy and marketing operations. Companies can limit the number of vendors they need to engage to achieve their business objectives, get the data they need for marketing initiatives, and ensure they’re privacy compliant when they do so.

 

With the two solutions working together, end users get a single touchpoint to manage their own data with companies, such as consent choices for data privacy, and also their contact information, communication preferences and purchase history. They feel better heard by companies and get the information they want, when they want it, which makes them more inclined to provide additional data and make more purchases. They can also feel confident about their privacy being respected because brands are transparent about data use.

Conclusion

The business landscape is changing on all sides, from customer expectations to government regulation to tools and technologies. Why would companies want to stick to the status quo when it’s legally riskier, provides poorer customer experience, delivers less and poor quality data and limited revenue opportunities?

 

The data ecosystem is rapidly evolving, and third-party cookies are going away. Smart companies are taking advantage of the opportunities that come with adapting to these changes. They’re driving revenue, regulatory compliance and better customer relationships with first- and zero-party data made possible by preference management and consent management solutions.

 

Customers have higher expectations than ever for respect for their privacy and personalized brand experiences. Companies have the tools to meet and exceed not only those expectations but also their own business goals, while efficiently managing costs and resource demands. There is no longer any reason or excuse to use endless customer churn and acquisition as a revenue strategy or to engage in legally risky data strategy without consent.

 

Interested in integrating preference management with your Usercentrics CMP? Sign up today for Usercentrics Preference Management, and you’ll be one step closer to building the best customer relationships.

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