The Data-Driven, Personalized Experience Economy: What Is the Role of Brands Within It? (Part 1)

Today, we as consumers provide companies with significant personal information every time we use products or services through devices like smartphones. How should companies earn customer trust and utilize this information? Over two parts, we present four key challenges for future corporate branding and marketing, illustrated with real-world examples from various companies.

Enhancing Brand Value Through Product and Service Experiences

 

For years now, brand practitioners, researchers, and consultants have been saying the same thing: Brands should be expressed not only through creative communication, but also through the experience of products and services.

People experience the world in different ways. A differentiated, authentic experience must be based on this unique understanding and respond to changes in individual behavior and lifestyles. Smartphones and connected devices have made it easier for companies to embody brand value and deliver personalized experiences.

By accessing various types of personal data and leveraging the ability to store and analyze it, companies can tailor experiences to individual consumers. Technologies like smartphones, sensor networks, and connected devices enable global corporations to address consumers individually. This kind of interactive engagement with each consumer was once the preserve of village shops as we entered the industrial age, but it has long been absent from global corporations.

The shift to personalized experiences transforms the relationship between brands and consumers. A consumer's purchase of a connected device is no longer the final stage of a customer journey that begins with awareness, progresses through consideration, and ends with preference and choice. Rather, it is the first step in their relationship with the company.

Consider, for example, the room temperature thermostats found in homes across Europe and America. Ten years ago, buyers would gather information by reading product reviews or talking to electronics store staff before purchasing. Today, when purchasing a connected thermostat like Google's Nest or Honeywell's Lyric, the product is merely the starting point of a relationship with the brand. The thermostat learns the household's patterns and family comings and goings. Nest sends monthly emails comparing that household's energy consumption to other homes in the neighborhood. This personalized experience transforms the relationship between brand and purchaser from consumption to participation.

The Role of Personal Data in Brand Awareness

Brands must collect various types of personal data—from self-reported information to digital exhaust (data generated by users' everyday digital technology usage)—to enhance experiences.

Beyond meeting legal requirements for privacy compliance, how can companies collect these data streams in a way that earns consumer trust while still benefiting the business? What does this mean for brands?

Four Key Implications

We clarify experience strategies in a world overflowing with networked smart products by supporting brands of all sizes. As we explore consumers' attitudes toward personal data, we believe Chief Marketing Officers (CMOs) face four critical challenges.

1. Value Exchange ─ Are you giving consumers compelling reasons to share their data?

2. Building a Brand Trust Framework — Are you embedding moments of trust, or "moments of truth," throughout the customer journey?

3. Aligning Brand Values and Privacy Measures — Are your privacy measures aligned with your brand values?

4. Building a Trust Ecosystem — As opportunities to share consumer data and digital exhaust with other companies increase, are you considering how to maintain consumer trust?

1. Value Exchange

Are you giving consumers compelling reasons to share their data?

Most consumers do not view targeted advertising as a value exchange. As evidenced by the popularity of ad-blocking software for browsers and smartphones, most consumers would prefer not to see ads, even if they align with their interests.

Moreover, targeted ads represent the brand through creative communication rather than through the experience itself. While cross-selling and upselling services based on personal data do contribute to the value exchange with consumers, companies should strive to provide enough value to make consumers feel the exchange is worthwhile.

Predicting what consumers will want next

Numerous companies leverage consumer data to deliver exceptional brand experiences in digital environments and boost sales. Amazon displays recommended products based on users' search and purchase histories. It is so adept at predicting what users will want next that it even patented "Predictive Shipping" in 2014.

Amazon's brand promise is a wide selection, abundant inventory, and convenient, fast shipping. Utilizing consumer data and analytics to better fulfill that promise means embedding the brand promise into the service experience.

An app that provides skiers with a lifetime of memorable experiences

 

Vail Resorts Management Company launched the EpicMix app for smartphones, linking it to season passes and tickets, as an attempt to move from purely digital to a fusion of physical and digital experiences. Skiers scan their passes each time they ride a lift, leaving a digital trail of their activities at the ski resort. The app calculates how much vertical skiers have descended in a day, how many days they've skied that season, and provides this information as convenient and interesting data.

EpicMix also fuels interest in skiing through challenges, contests, and awards. The resort hires professional photographers to take pictures of people enjoying skiing or snowboarding, linking these photos to the skier's profile and app. Vail Resorts' philosophy is to provide "experiences that create lifelong memories." Specifically, the value offered to skiers is enhancing the enjoyment of the outdoors and skiing. EpicMix successfully achieves this.

Software for power plant health management

Experiences customized using consumer data aren't limited to consumers. GE Energy (now GE Power) provides software tools to utility customers for managing power plants. Power plants are highly complex systems requiring maintenance and replacement of thousands of components based on their service life. Rather than being simple "on" or "off" machines, power plants resemble living organisms with varying degrees of health. Since they generate electricity using electricity, unplanned downtime due to component failure incurs significant costs.

GE's MyFleet product, which can be described as a health management tool for power plants, tracks and monitors many elements of the system. It uses this data to minimize downtime and optimize the plant's health. The MyFleet software system experience embodies GE's brand promise to deliver "unprecedented performance levels" by bringing together superior machinery, advanced analytics, and talent through the Industrial Internet. At the same time, it is customized to meet the specific needs of the power plants customers operate and the various operators who maintain them.

Diagnosing consumer types from fitness trends

 

Examples like this show that brand experiences can only be delivered through product and service design. So, is there a role for marketing? Absolutely. For instance, frog recently collaborated with a fitness club chain offering a wide range of services, including personal training, fitness clubs, spas, and specialized content.

To deepen bonds with current and future members, frog created a "recommendation" algorithm that connects each member with services and content matching their "fitness personality type." This tool, similar to the Myers-Briggs personality test, diagnoses a "type" from members' conversations. The algorithm then shapes highly relevant, memorable experiences across all brand touchpoints—from the initial orientation to post-workout nutrition.

2. Building a Trust Framework for the Brand

Are you incorporating moments that build trust into the customer journey?

To deliver value commensurate with the personal data provided, brand managers must examine the entire customer journey and establish touchpoints that strengthen consumer trust in the brand. Simply optimizing mobile experiences, physical experiences, or customer service center experiences individually is insufficient. Unless all elements complement each other, an exceptional experience cannot be created. CMOs must build a framework that holistically enhances trust in the brand and optimize experiences that build trust.

Two MOTs: "Moments of Trust" and "Moments of Truth"

 

frog recommends increasing both "Moments of Trust" and "Moments of Truth." Google pioneered the concept of the "Zero Moment of Truth" (ZMOT), referring to the moment when buyers gather information, search for coupons, or compare stores.

Plan to add trust to ZMOT. Create the "Zero Moment of Truth and Trust" (ZMOTT). For example, incorporate features that boost customer confidence, like the online reviews popularized by Amazon. A bolder example is Progressive Insurance. Through their online quote system, they display quotes from competing insurance companies.

The "First Moment of Truth" and the "Moment of Trust"

The "First Moment of Truth" (FMOT) is the moment a consumer first encounters a product or service. If we also view this as an opportunity to build trust, it becomes the "First Moment of Truth and Trust" (FMOTT). All three major US phone companies—AT&T, Sprint, and Verizon—have re-examined their FMOT to add trust.

In the telecom customer journey, physical stores play a crucial role as the decision point for purchasing new devices or signing up for plans. All three companies modified the in-store experience—such as providing dedicated spaces or tables for one-on-one conversations with representatives—to strengthen trust during this critical moment. When signing up for a new plan, consumers share significant personal information, such as driver's licenses, credit scores, and payment terms. Sitting in a nearly private space, rather than just interacting at a counter, and being able to see all the information the carrier collects builds trust in the brand.

"Second Truth" and "Moment of Trust"

Uber is an example of a company that successfully transformed the Second Moment of Truth—the moment customers buy and use a product—into the "Second Moment of Truth and Trust" (SMOTT). They achieved this in several ways. First, they enabled drivers and passengers to get to know each other and build human trust. Second, it uses GPS tracking so both drivers and passengers always know where they are going. More recently, it introduced a family tracking feature, allowing account holders to monitor their family members' movements in real time.

For example, imagine sending an elderly parent to a hospital checkup. You can book an Uber on their behalf, ensure they head to the hospital as scheduled, and see them arrive safely. While some Uber users have questioned the system's resistance to spoofing, the company has built a clear trust framework, reinforcing its brand promise of being "everyone's private driver."

Strengthening Trust Throughout the Customer Journey

The Walt Disney Company, ranked 12th in Forbes' 2015 Most Trusted Brands list, is a prime example of a company that carefully crafts each step of the customer journey to build and strengthen trust, encouraging visitors to willingly share personal data. Guests at Walt Disney World Resort receive a passive RFID (radio-frequency identification) wristband called a MagicBand, delivered to their home weeks before their visit. This wristband serves as an admission ticket, a FastPass for rides (which can be reserved in advance via the website or mobile app), a key to their resort hotel room, a payment terminal usable at kiosks throughout the parks and hotels, and an ID bracelet (allowing them to tag themselves or their group in photos taken by professional photographers in the parks).

The latest MagicBand incorporates features designed to make the park experience even more dreamlike. For example, while waiting in line for Test Track at Epcot, guests can design their own car. While riding, the car's various performance metrics are quantified based on the design, allowing guests to create a commercial for their own vehicle. By leveraging consumer data to enhance the user experience and strengthen trust throughout the entire customer journey, the company fulfills its brand philosophy of delivering "magical" experiences to guests.

Using personal data to create better service and product experiences

 

This high level of trust is essential for companies to offer services and products utilizing personal data. In 2014, frog conducted a survey across five countries examining consumer attitudes toward sharing personal data with multiple brands. The results showed consumers were willing to share self-reported data with companies, even when the perceived value in return was small. Most consumers also don't hesitate to share demographic information and preferences, especially when that information improves their service or product experience.

For example, users of the music streaming service Pandora share their favorite artists when creating playlists or stations. However, consumers are somewhat more cautious about digital exhaust—the personal data generated by using connected devices and digital services. Continuing with the Pandora example, this includes data generated when playing a specific station more than others or skipping particular songs. Companies deepen their understanding of consumers through each individual action and piece of personal data.

However, most consumers still consider this a fair trade-off if it improves their service experience. They become sensitive when companies use personal data for marketing or sell it to third parties.

The continuation of this article (Part 1) can be found in the web magazine "AXIS".

This article presents content originally published in "DesignMind," a design journal operated by frog, translated by Transmedia Digital under the supervision of Mr. Noriaki Okada of Dentsu CDC Experience Design Department.

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