January 22, 2018
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Posted October 13, 2017
“Customer is king” is an age-old business mantra. However, in the anonymous world of the digital economy, a more apt phrase could be “customer is stranger.”
But, groundbreaking new technologies are putting the spotlight back on the customer.
For many digital businesses, getting to know your customers really meant little more than having the correct username, password and credit card number. But, customer authentication based on this static identity data is obsolete and ineffective in today’s post-breach world.
So, digital businesses introduced additional steps to the authentication process in an attempt to weed out fraudsters. However, these extra steps led to friction along the customer journey – something today’s want-it-now digital consumer won’t tolerate.
And, as many digital businesses have witnessed, if you don’t give your customers the experience they demand, they will become former customers – abandoning their journey with you and quickly taking their business to your competitor.
According to Smart Insights, the global online shopping cart abandonment rate for Q1 2017 was 75.6 percent. And Forrester Research reports that the amount of money lost by online retailers due to shopping cart abandonment will soon climb as high as $31 billion.
Digital businesses naturally go to great lengths to improve conversion rates and drive up online revenue – the lifeblood of their business. Yet, indiscriminately deploying cumbersome authentication steps flies in the face of these commercial efforts.
A full 74 percent of companies that have deployed multifactor authentication say they receive complaints about it, and nearly 10 percent of their users flat-out hate it.
Much of this resentment is the feeling by loyal customer that they are being treated like criminals, having to validate who they are.
According to a CMO Council survey, 36 percent of respondents say their biggest shopping frustration is when they are not treated like the loyal customers they are. The cost of continuing to frustrate consumers is brand abandonment, as 47 percent say they will stop doing business with a brand.
In short, digital businesses simply can no longer afford the high cost of abandoned shopping carts and frustrated customers. Yet, security must be of paramount importance, as the impact of a cyberattack can be devastating to your business.
Thankfully, providing a frictionless customer experience and maintaining a safe digital environment are not mutually exclusive.
Employing more customer-centric authentication that helps businesses understand the digital DNA of users and their unique online footprint would be a good start.
That comes in the form of a unique digital identifier that unites online and offline attributes in real time. It puts the customer front and center, enabling organizations to understand the true digital identity of their customers.
Even when customers – as they are wont to do – use different devices, access your site from different locations or change other behaviors, digital businesses can still accurately recognize these returning users. Accurately identifying returning customers eliminates the need for multiple logins or authentications.
Of course, customers don’t restrict their online activity to one or two sites, instead visiting multiple sites each day. And, until now, customers had to re-introduce themselves on each and every site they visit. That’s a lot of hoops to jump through.
But, a persistent identifier that could be used across all digital properties they visit would streamline the login and authentication process – a long coveted goal of everyone operating in the digital economy.
In the end, customers get the frictionless experience they expect while you keep them – and your business – safe from fraudsters.
Using digital identities, businesses can also provide their trusted customers with an added level of protection. If the identity of a loyal customer is ever misappropriated, anomalies associated with that customer’s digital ID can be detected in real time, preventing a customer’s account from being compromised.
If the customer truly is king, then it’s time for digital businesses to pull back the curtain of anonymity to finally understand who their customers truly are – giving them the best experience possible while ensuring they are protected.
If businesses do that, maybe that old mantra will finally fit the digital economy.
To learn about our unique approach to universal customer identity, read our new white paper on ThreatMetrix ID™.