Posted by Dave Frankland on November 3, 2010
In recent inquiries and in one-on-one meetings at our Consumer Forum last week, I’ve had several discussions about the preference management landscape. We’ve written about the trend, but many of the questions relate to the players in the market. Given that I am unlikely to have time to write a landscape report in a reasonable timeframe, I figured I’d outline how we view the market and highlight some of the players.
Conceptually, I divide preference management into managing compliance versus managing preference. I don’t have a problem with compliance management — I would strongly urge companies to focus on it. But I don’t think of it as true preference management.
Compliance management can be further divided into a) complying with legal requirements, and b) complying with consumer requests relating to how you communicate with them. Legal requirements are pretty straightforward and in many cases channel specific — CAN SPAM for email communications, The National Do Not Call Registry for telemarketing, The Telemarketing Sales Rule for telesales, etc. Not complying with these laws has legal ramifications, and we usually find legal departments playing some sort of role in governance and compliance.
Consumer compliance usually relates to opting in or out of communication. That “opt” is sometimes done with the company directly — think “unsubscribe” or opt-in pages for email communication — and sometimes through third parties such as the DMA and many of the catalog opt compilers like PrivacyCouncil.org, Catalog Choice, and the DMA’s DMAChoice.
Preference management is different. Preference management is about allowing a consumer or customer to decide how you communicate with them. This might relate to the type of content that you send; it might relate to the channels in which you communicate with them; or it might relate to the frequency with which you contact them. In the best cases, it allows for combinations of all three. For example, I might not wish to receive credit card offers at all, or maybe I’ll accept one every other month and would prefer to receive it by direct mail, but once my balance hits a certain level, I might want a text message to be sent immediately. As marketers, we talk all the time about the consumer being in control — preference management is a great example of where the rubber meets the road. Are you actually giving them control or are they taking it?
There is a gray area in how companies talk about preference management, and that is the area of implied preferences. Clients and vendors sometimes use the term preference management when speaking about implied preferences, but again, I don’t believe it should be called preference management. Recognizing that a customer only responds to certain content or in certain channels and using that to inform future communications has nothing to do with preference, as the customer sees it. I’m not saying firms shouldn’t observe customer behavior and adjust how they communicate — I would strongly recommend it, since it can only enhance the customer experience and should increase your campaign profitability. But that doesn’t make it preference management, it makes it good marketing.
So finally, to the point of this post — where can you go for help? Start with your existing service providers. Email service providers like e-Dialog, ExactTarget, and Responsys; database marketing service providers (MSPs) like Acxiom, Epsilon, and Merkle; agencies; and voice communication services companies like SoundBite Communications, SmartReply, and Varollii have all evolved from capturing preferences in their “traditional” channel to at least capturing preferences across channels. The challenge for marketers is that other than with agencies and MSPs, adhering to the customer’s preference in multichannel communications is up to you. The two companies that I’ve come across that seem to offer a preference management and compliance offering across channels are Gryphon Networks and PossibleNow.
Preference management is an extremely important component of customer contact strategy. Failing to think about it, and increasingly, failing to do something about it is tantamount to customer abuse — continue to ignore it and expect your customers to strike back.
I hope this helps — let me know if you have another perspective or if there are other players out there that I’m missing.