Preference management and consent management in the realm of customer experience, while often used interchangeably, are really two sides of the same coin. Closely related, yes, but with the key distinction that consent is an unambiguous declaration from the customer (“You may/may not share my personal data with a third-party”). Preferences may involve consent, e.g., a customer consents to SMS notifications, but preferences may also be inferred, such as a brand analyzing transactions to know a customer prefers blue to green.
Nuances aside, what’s most important for brands to understand about consent and preference management as they relate to delivering a relevant, personalized customer experience is that both are essential to develop and maintain trust. Honoring consents and preferences to the letter and in spirit increasingly represent brand equity, thus a failure to abide by a customer’s stated or unstated wishes erodes trust.
Consider new Dynata research in a survey commissioned by Redpoint, where 48 percent of consumers surveyed said they would stop doing business with a company that gave away personal data without direct consent. As for preferences, a 2021 Harris Poll survey revealed that 82 percent of consumers said they are loyal to brands that demonstrate a thorough understanding of them as a unique customer – with a “thorough” understanding naturally to include understanding – and abiding by – a customer’s preferences.
A closer look at the intricacies of consent and preference management will shed light on why both are key components for building a relationship with customers built on trust.
What is Consent Management?
Consent management refers most commonly to compliance with data protection regulations, GDPR and CCPA chief among them. The former requires that users must give clear and affirmative consent prior to having personal data collected, with the latter requiring businesses to make it possible for customers to opt-out of having their data disclosed or sold to third parties.
From the customer’s perspective, merely a choice to opt-out is not the same as directly opting in – particularly if the opt-in option is buried in small print at the bottom of a web page. Part of managing consent includes the decisions a brand makes about whether to comply with the letter of the law, but not the spirit; i.e. does the brand believe it covers its bases by offering a difficult opt-out process? If 48 percent of consumers will leave the brand if it shares data without consent, an obscure opt-out option may not placate an angry customer.
A brand’s interpretation of consent should include a risk/reward calculation. Is selling data to a third-party worth potentially alienating a customer who has provided soft “consent” (by not opting out)? Consider an Accenture study where 83 percent of consumers surveyed said they are willing to share data with a brand in exchange for a personalized experience – on the condition that the brand is transparent about how the data will be used, and as long as the customer has control over the data. And in the Dynata survey referenced above, 74 percent of consumers surveyed said they either “rarely” or “never” share data without knowing precisely how a brand will use it.
Honoring the sharing of personal data in exchange for a personalized customer experience is consent-based relationship management; whether clear and affirmative consent as per GDPR, or a more subtle dynamic where customers trust their data is protected and used in good faith, a consent-based relationship adds value outside of a transactional basis. It builds trust.
What is Preference Management?
Preference management, as its name suggests, is not as ironclad as consent management. While technically optional for a brand, the risk in lost customers may be as significant, if not more so, than financial penalties for violating a data privacy regulation.
Preference centers are one way brands can honor a customer’s stated preferences for choices such as channel, frequency, delivery location, styles, etc. For subscriptions and services, preference centers might include options for type of content to receive, renewals, payments, etc.
Preference centers might also include customer preferences that a brand infers from interactions, such as size, color, best time of day to receive an email, etc. An analysis of online behavior might yield preferences that include types of images clicked on, content interacted with or any other signal that tells a brand how a customer likes to engage online.
Preferences might both be directly stated as an option and inferred. Size, color, and email frequency are all examples. A brand might directly ask a customer how often the customer wants to receive an email, or it might send an email biweekly rather than weekly simply from knowing how often the customer opens an email.
Managing Preference & Consent Management
Managing preferences entail managing the entire scope of a customer’s preferences, declared and inferred. Both can live in the preference center, and demonstrating a personal understanding of a customer entails perpetually honoring a customer’s preferences throughout a customer journey.
Preference management can be thought of in the context of a home having a main circuit breaker, with light switches scattered throughout the house. In the analogy, the main breaker is the preference center, with the switches representing how a customer engages throughout a journey. Managing preferences isn’t just flipping one main switch. With the breaker powered on and the juice flowing, the brand must see how a customer is moving through a journey and deliver against every preference – declared and inferred – at every touchpoint. Throughout a dynamic journey, there may be additional opportunities to collect consent or analyze preferences, but the overarching objective should be to use the information about a customer’s preferences responsibly in the service of a highly relevant and frictionless customer experience.
Secure in the knowledge that their preferences and consent are managed to the spirit and letter of the law, exemplified by those preferences consistently being acted upon, a customer reciprocates that value by providing more information about themselves that in turn is used to further enhance the experience and deepen the trust between a customer and a brand.
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