Maritz Motivation Solutions, a leader in providing consumer and channel loyalty, employee engagement and sales incentive programs to U.S. and global companies, partnered with researchers at Harvard Business School for an academic study published in the Harvard Business Review.
The study found that when marketers are transparent in communicating how they have used customer data to target advertising messages, customer engagement and purchasing increases.
People are increasingly concerned about how their data is being used by marketers – especially in the online environment. In Ads That Don’t Overstep, Harvard Business Review authors Leslie K. John, Tami Kim and Kate Barasz examined consumer reactions to marketers’ use of personal data for ad targeting, and offered guidelines for marketers on effective targeting based on what customers consider acceptable. For the study, Maritz Motivation Solutions provided the field data for two tests focused on transparency conducted on RewardSphere, the company’s online rewards site.
The two experiments varied the language on the product detail page. In the first one, half the audience saw “recommended” items, while the language for the other visitors was more transparent saying, “recommended based on your clicks on our site.” With this language, visitors were 11% more likely to select and click on items and spent 34% more time on the recommended products page. They also spent 38% more on recommended items.
This experiment demonstrates that customers feel more comfortable and are more engaged when they know that recommendations are based on information related to their behavior on a website they trust – rather than having that information come from other, less trusted or unknown sources.
The second experiment was similar but used different language. Like the first experiment, half the audience saw “recommended” items, but the language for the other visitors was “recommended based on what you’ve shared with us.”
The more transparent language highlighted that recommendations were based on information visitors had explicitly provided about themselves – with the result being that they were 40% more likely to select and click on items, and spent 31% more time on the recommended products page.
The Maritz Motivation Solutions experiments spotlight the benefits companies can realize by increasing transparency in an environment where trust is already high, such as a customer loyalty or employee engagement program.
For more insight, check out this case study about the experiment.