Preference Centers Aren't Worthless -- Your Approach Can Be

by , Dec 27, 2012, 10:42 AM
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One hot topic at the recent Email Insider Summit in Park City, Utah, centered on the role and value of email preference centers. As with other email-marketing disputes, the debate that emerged from a panel discussion reflected general disagreement over the details and how marketers implement preference center, rather than focusing on the bigger picture.

The anti-preference center camp's argument basically follows two lines of thinking:

1.     Few subscribers actually use preference centers. Therefore, they have little value.

2.     Consumers' behavior indicates interest and intent better than stated preferences or interests.

The pro-preference center camp cites factors such as these:

1. Explicit preferences and interests can provide valuable subscriber profile data for better segmentation and targeting.

2. Preference centers provide alternatives to unsubscribing, such as changing email address, email frequency, communication preferences.

3. Profile or preference data can present a fuller picture of a consumer beyond his or her behavior alone.

Looking deeper into the role and types of preference centers, we can see both camps are closer to each other than at first blush. Many folks really were talking about the efficacy of different types of preference centers.

I classify preference centers into four types:

1.  Opt-in (presented when someone is asked to join your email database)

2.  Update (when someone clicks a link such as "Update Preferences")

3.  Opt-out (similar to the update but designed specifically to offer alternatives to unsubscribing such as decreased frequency, snoozing subscriptions, etc.)

4.  Purchase/Account Registration (designed mainly to be used in account registration or the purchase process; email subscriptions are a typical option in this process).

Let's tackle the two core arguments against preference centers:

1: Preference centers are a waste of time because subscribers don't use them. This is often true for the update preference center, because subscribers likely don’t recall the preferences they provided at opt-in or can't easily find the preference center. Or perhaps they simply don’t see the connection between preferences and more relevant emails.

To make this kind of preference center work better, you must promote the preference center beyond your welcome email. Consider sending "Update Your Preferences" emails a few times a year.

Also, watch for behavioral signals. If engaged subscribers go inactive, invite them to update their preferences.

Last, label the links to your preference center in your emails with the verbs that reflect what the subscriber wants to do: "Change Email Address," "Reduce Frequency" or "Modify Interests."

Argument 2: Preference centers are a waste of time because people lie or don't do what they say. Both points are true. However, people will lie if you ask for information that they don't see as vital or necessary before they have learned to trust you. So, reassure customers about how you will use their data and protect their privacy to build trust.

Also, don't ask for too much data too early in the relationship. That only encourages people to lie. Use progressive forms that capture data at different points during the relationship.

Finally, people often buy things that don't reflect their expressed demographics or interests. They buy gifts or research products that reflect new interests. For example, someone who buys a dress could be a woman shopping either for herself or for a gift for someone else, or a man buying it for his wife, a girlfriend or daughter.

Without gender data, a retailer could assume the dress purchaser is female and begin targeting a male subscriber only with offers for women's clothing and accessories. That retailer could be leaving significant money on the table.

Here, capturing the right information during opt-in makes sense for the new subscriber and gives the marketer a more complete profile. Combining profile, preference and demographic information with behavioral data is the right answer.

The reverse challenge is also true. Suppose a new subscriber tells you that he is male. You send him only male-oriented offers. The potential result? He goes to your competitor to shop for his wife.

The problem is not with the preference center or bad data, but how you market. Knowing someone's gender does not preclude you from providing offers for the opposite gender. Rather, you might regularly include secondary gift suggestions. (It gets more complicated if your subscriber is LGBT, of course.)

Finally, the concept of a preference center is morphing to include what subscribers do and do not do -- not just what they say, as I wrote in an earlier column, “Preference Centers: Rethink Rather Than Tweak.”

Both sides in this debate have strong points. However, preference centers are neither dead nor valueless. Nor are they panaceas for bad marketing. As with most marketing issues, the answer and results you achieve depend upon how you actually implement a tactic or strategy.

Until next time, take it up a notch.

2 comments on "Preference Centers Aren't Worthless -- Your Approach Can Be".

  1. Brian Jaffe from Nationwide
    commented on: December 27, 2012 at 4:40 p.m.
    Loren, thanks for the column. At the Email Insider Summit it was interesting that panel triggered so much discussion. It is no doubt still a hot-button topic. So much to say on the issue, but I just wanted to add some quick comments, and maybe try to lay some additional groundwork, and maybe refocus the discussion a bit. First of all, we may want to consider broadening the terminology we use to Self-Service centers. Every large company I know of, and practically every SMB as well, understands the value of having customers self-service their accounts online. The reasons for online self-service themselves are manifold, but clearly the cost of having a customer link to an online area to change a preference is far more efficient and cost-effective than having that same person call customer-service @ $1-5/minute. I could ramble on for quite a while about the benefits of online self-service, of which preferences would (should!) be a subset, before even getting to the question/value of capturing marketing preference data. I would also suggest that HOW preference data are consumed from an analytics and CRM perspective plays a key role in understanding the efficacy of the preference (self-service) center and the data. The data are the means to a marketing strategy, not the end. I think too many see it as the end, and hence some of the frustration or limitations, as may be the case.
  2. Pete Austin from Triggered Messaging
    commented on: December 28, 2012 at 8:30 a.m.
    Count me in with the profile center sceptics. You can get so much more information by integrating with your shopping cart. And you don't put a road block in the way of your customers buying stuff.

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