Brands using social media to attract new customers are barking up the wrong tree, according to a new industry study, which claims the privacy, trust and transparency offered by other channels makes them far more effective.
The DMA’s Customer Acquisition Barometer 2014 – backed by McDowall – shows that 43% of consumers prefer email as their most trusted channels for sharing information, closely followed by 42% who rated brands’ own websites as their favoured route.
The findings seem to support Deputy Information Commissioner David Smith’s recent assertion that brands which make “a feature of [their] privacy approach” and are “getting in tune” with customers will win out.
The report also found that only just over half of consumers (52%) claim to have willingly shared their personal information with a company in the past 12 months, in spite of marketers saying more than half of their budgets (59%) are dedicated to customer acquisition activities – compared to just 20% on retention.
While email and brands’ websites dominate in the trust stakes, social is failing to win consumers’ approval – despite marketers’ commitment to it. Four out of five (77%) marketers said they use it for acquisition purposes, but only 16% rate it as effective. This is perhaps because 54% of consumers rate it as their least trusted channel for sharing their information.
DMA executive director Chris Combemale said: “Effective customer acquisition relies on trust and transparency which is undermined by some companies, organisations and institutions misusing, abusing and exploiting people’s information against their expectations and wishes.
“The most successful companies are respecting their customers’ attitudes to privacy and making trust a critical brand differentiator.”
The report also reveals that marketers are anticipating a shift in focus on their performance targets. Currently, 41% report cost-per-acquisition as their primary measurement, compared to 37% on quality of leads and 21% on quantity of leads. However, over the next 12 months 35% of marketers expect quantity of leads will rise to become their number one target.
McDowall founder and chief executive Graham Bate said the Customer Acquisition Barometer 2014 highlighted for the first time the conflicting pressures facing marketers in their quest for new customers, but also revealed ways to reconcile these pressures.
“By probing both consumers and marketers about the way brands approach prospects, the Customer Acquisition Barometer is acting as a two-way mirror view on the most fundamental task marketers must execute,” Bate said.
“Consumers’ ambivalence about parting with their data, as well as the disconnect between marketer confidence in social media as a channel and consumer willingness to respond this way should sound alarm bells for marketers. The good news is that the Customer Acquisition Barometer – a qualitative as well as quantitative research exercise – provides signposts for overcoming these challenges.”
The report surveyed 1,509 UK consumers and interviewed 116 senior marketers as the first annual benchmark of current trends and critical issues brands face in acquiring new customers. It also includes insight from a focus group comprising senior marketers from brands including HP, Aviva, Avios and Wonga.
Customer acquisition study launches
McDowall signs Saracens deal
McDowall bolsters senior team
How you can make social media pay
Twitter trials lead-gen ad plan
Callcredit buys lead-gen specialist