It’s hard to ignore Apple’s CEO Tim Cook. After January’s announcement of the largest quarterly profits in corporate history, the Apple CEO is at it again with the launch of the Apple Watch and the Apple Pay payment system.
Putting Obama on the spot
We believe customers have a right to privacy, and the vast majority of customers don’t want people knowing everything about them
When Cook pronounces people pay attention so his strong opinions on the privacy issue last week not only put Barack Obama on the spot but almost prompted me to pack my bags, leave the office and not come back. Almost but not quite.
Talking at the Goldman Sachs Technology and Internet Conference about the motivations behind the launch of Apple Pay, Cook’s comments could be taken as a blow against data-driven personalized marketing. He said: "We believe customers have a right to privacy, and the vast majority of customers don’t want people knowing everything about them."
Customers have a right to privacy
"When you make a purchase, we make a little bit of money. It’s very simple, very straightforward. You are not our product, that’s our product. There’s no need for us to know what you’re buying, where you’re buying, I don’t want to know any of that."
Fair enough, Cook is talking about the business model around a specific payment system but if applied to the world of brands and retail his remarks have potentially worrying implications for retailers and manufacturers who have invested billions in loyalty programmes and other data collection systems.
His remarks have potentially worrying implications for retailers and manufacturers who have invested billions in loyalty programmes and other data collection systems
Putting aside for a moment that Cook’s comments are a bit rich given the premise of the Apple Watch, which seems to depend on accessing acres of very personal health and fitness data, should we be concerned?
Loyalty schemes are not dead
In terms of specific data use, as an agency that works with Sainsbury’s and Nectar, I certainly don’t think loyalty schemes are dead (far from it). Of course, loyalty schemes still need to work hard to add value, be relevant, fit lifestyle and new shopper missions/behaviours, but no consumer loyalty research I’ve seen has ever cited ‘being fed up with giving my data away’ as a reason for not using it.
That said, Cook’s point about data collection is relevant when applied to brands that take things to extremes.. The movement towards trying to communicate 24/7 and expecting two–way relationships on an ongoing basis is under pressure. We’ve moved from a language of ‘always-on’ to one of ‘continuous presence’. I’d argue that there needs to be a strategic shift away from expecting to be always talking to people (posting online, emailing at strange times of the day) to one of being ‘there when you need us’ in the channels you expect. We have deployed this thinking for the likes of Activision, Durex, Lynx and Virgin Trains.
Experience enhanced through data
Apple is relentlessly product focused and has been superb at building customer loyalty through a great product experience. However, I would argue that many brands have enhanced the customer experience through use of personal data. Let’s be careful of setting-up a false dichotomy of products and data as enemies. I like the fact that Amazon knows my history and has data on me. I like that my supermarket knows my shopping habits and can prepopulate my shopping basket. I like the fact that Virgin Trains knows my frequent travel routes and alerts me to offers and upgrades. As long as brands can tick the ‘trust’ and ‘usefulness’ argument then their use of personal data is valid and positive.
Let’s be careful of setting-up a false dichotomy of products and data as enemies
Transparency and trust
Cook’s warning is less about consumers not wanting brands knowing everything about them and more about consumers being duped into ‘unknowingly’ sharing their data. So the issue for brands is to focus on transparency and earning the trust of consumers so that they feel comfortable sharing their data.
So the death of loyalty and data-driven relationship? I don’t think so. But there is a definite need for a readjustment towards a more human outlook that balances privacy concerns against people’s desire for useful engagement with brands.