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Insight: Will the mobile number replace the web cookie?

Over on Retail Touch Points, contributor Guy Weismantel wonders what will replace the humble web browser cookie in a multi-device, multi-screen world. How can retailers track customer behavior across devices, connect in-store to online behavior, and deliver targeted, relevent messages based on customer activity throughout the purchase cycle? Weismantel suggests that the mobile phone number is the obvious connector - even as he admits that there are numerous privacy considerations at play. But isn't there a more obvious connector that eliminates the need to invade consumer privacy? Let's take a closer look.
 
By Rick Ferguson
 
Weismantel is right to acknowledge that the web cookie has outlived its usefulness as a marketing tool. In addition to the reasons that Weismantel offers - that cookies track only web browsing activity in a world in which an increasing amount of retail interactions happen through the mobile device - cookies have long been used not to build customer relationships, but rather to deliver targeted one-off sales promotions and discounts via online retargeting.
 
To replace the cookie, Weismantel offers the humble mobile phone number. As he notes, consumers now use their phones to interact with brands in-store, online, and through mobile apps. The mobile phone number is the common denominator that can tie all of this activity together. Money quote:
 
"Determining which specific touch points on a mobile device were successful, and which messages are resonating with their target audiences, is key in converting leads and maintaining customer loyalty. That's where the phone number comes in. The ability to link online exposure to an individual who did (or did not) make a purchase later can help retailers understand what their customers really want, even if it differs across demographics."
So far, so good. But what about consumer privacy? Are customers willing to provide their mobile phone number to every marketer hungry for their data? Is there a way to leverage the mobile number for identification anonymously? Weisgarber has a few answers to these questions, but they aren't exactly comforting to marketers who hope to build relationships on more than an anonymous, transactional basis. For example, Weisgarber advocates:
 
  • Aggregating data: "For example, phone numbers can be used to create an audience graph that shows customers’ mobile behavior anonymously. Audience graphs can be broken down by specific demographics or target audiences, ensuring brands glean valuable insights without compromising confidentiality."
  • Mobile number encryption: "Encrypting phone numbers is one way to [ensure privacy]," Weisgarber notes, "such that the data from [a customer service] call itself is still collected, without being tied to an individual's identity."
 
Well, okay, but how exactly does all of this data aggregation and phone number encryption facilitate any sort of marketing beyond the usual one-off promotions and margin-crushing discounts? There is, in fact, another customer "license plate" available to marketers that does allow for relationship marketing while eliminating privacy concerns: the loyalty program identifier. Consider these advantages:
 
Consumers willingly link loyalty IDs to their devices. To access the rewards and recognition available through a retail loyalty program, shoppers will voluntarily connect their mobile number, their social media accounts, their online profiles, and even their preferred tender to the loyalty identifier. The loyalty ID provides a common point of entry to track every shopper interaction - in-store, online, and via the mobile device.
 
Loyalty programs provide an exchange of value for information. Consumers today understand that their data is valuable to marketers - and they're willing to trade that information for value in the form of rewards and recognition. By connecting data collection to the loyalty program, marketers help build trust, relationship commitment, and reciprocity in their customer relationships - and strong relationships build loyalty.
 
Data collection is transparent and permission-based. By inviting consumers to opt-in to data collection through their loyalty identifiers, they grant you explicit permission to market to them on a one-to-one basis. There's no need to hide behind data aggregation and encryption; shoppers understand and expect that you will deliver marketing personalization and relevance based on their shopping behavior.
 
Weisgarber would no doubt wonder how you in turn reach customers who aren't in your loyalty program - and how we can tie customer acquisition to loyalty program activity absent something like mobile number tracking. The answer is to funnel new customers into your loyalty activity stream as soon as possible. The transparency, permission, and trust inherent in the loyalty exchange will soon allow you to understand which of these new customers are most worthy of a deeper relationship.
 
Rick Ferguson is CEO and Editor in Chief of the Wise Marketer Group.