Tech Line

Ensuring Your Customers’ Privacy is Good Business

Protecting customers’ data privacy might be viewed by many marketers as an unwelcome impediment to their ability to effectively tailor customer communications and experiences. Not so. In fact, on the contrary, ensuring such privacy and data security can be both a business benefit and differentiator.

Today, 71 percent of countries around the globe—130 total—have enacted data-protection and -privacy legislation. In addition to EU-based regulations (General Data Protection Regulation–GDPR), states such as California have rolled out the California Consumer Privacy Act of 2018 (CCPA), as have Virginia, with the Virginia Consumer Data Protection Act, and Colorado, with Colorado Consumer Data Protection Laws.

For enterprises to do business with any citizen in the European Union (EU), or with certain states in the U.S., they must be in compliance by providing customers with information regarding how their data is being used and what their right is to delete that data, as well as providing them with the ability to opt-out of data collection. According to Gartner, 65 percent of the world’s population will be covered by privacy regulations by 2023.

Gartner also predicts that privacy will become a reason to purchase for the consumer, much in the way labels such as “organic” and “sustainable” have drawn in consumers.

“Privacy-first products are likely to follow this trend,” said Bart Willemsen, vice president analyst, Gartner. “To increase customer trust, executive leaders need to build a holistic and adaptive privacy program across the organization and be proactive instead of responding to each jurisdictional challenge.”

Data privacy can impact how a customer perceives your company, as well as how employees view their workplace and how the government and media treat the company. Having thoughtful data practices can be a core differentiator for brands who want to show they are focused on data transparency and ease of access. This position on privacy can reveal your core values to customers, as well as show what a responsible approach to data privacy can look like.

This matters since 90 percent of consumers believe that the way their data is handled reflects how they’re treated as customers, according to a survey by Cisco and Harvard Business Review.

Apparently, customers really do care about data transparency and privacy, and what data practices you have as a brand will telegraph to people what your company is all about.

Trust Between Customer and Business is Eroding

Gartner reported that, beginning in 2019, there’s been a decline in overall customer satisfaction, which has only continued to increase as trust between businesses and customers has eroded. Clearly, such customer demand and concerns has forced the hand of national and state governments to address data-privacy concerns.

“People are actively demanding privacy protection, and legislators are reacting,” said Willemsen. “If your organization operates globally, focus on standardizing operations in accordance with the GDPR, and then adjust as required for local requirements.”

To address this, Willemsen recommends leveraging technology solutions and automating portions of your privacy-management program by employing privacy officers or data-protection officers to ensure compliance and customer satisfaction.

And none too soon, for Americans are not feeling in control of their digital lives, with 81 percent reporting they felt little to no control over their data, according to a Pew Research study.

Protecting Data at Rest or in Motion

Ensuring data is protected whether it is at rest or in motion is critical to data privacy and security, said Adam Young, director of solution architecture for PFL.

“In my role, data privacy and security come up in the context of issues such as, where is my data going to be stored, which is usually in a CRM or marketing automation platform. And then, more specifically, where is transactional data going to be stored when I when I take a marketing motion.”

Young went into more detail on how important it is for a marketer to understand how long data is available to them for use:

“Here is what I mean by marketing motion. If I send somebody a name and an address and a phone number and an email address, I want to know that it’s useful for that window of time that’s necessary to take the marketing motion,” Young explained. “I also want to know that I have control to have that data deleted or to have certain aspects of the data redacted so that I don’t have personally identifiable information [PII] just sitting around somewhere. Asking those questions and making sure that you understand exactly the lifecycle of your data is crucial.”

In the end, according to Young, it is all about having policies documented and widely available. “You need to know exactly what your data retention policy is,” he said.

Data Privacy and Transparency Best Practices

Establishing good data retention and more thoughtful data practices is critical to ensuring your customers’ privacy. Here are some initial steps and suggestions for how to establish and promote good data security and policies across your organization.

  • Collect less data. Chances are, you have a lot of data. From different sources, in different formats, and not all of it is accessible, useful, or being leveraged for any business value. Do you really need all the data you are collecting?
  • Easy-to-understand policies. Make your privacy policy easy to understand and accessible to the average user. It should be in clear language and explain to the customer how you collect data and use it for their benefit. Explain value to the customer.
  • Hire privacy professionals. Just as data needs data scientists and analysts, data privacy also needs pros that oversee data policy across the whole organization.
  • Provide controls. Your customers want to know about and control how their data will be used. You need to make it easy for them to modify preferences on your site with easy data- management tools.

The need for professionals to manage data privacy across an enterprise has led to the development of a new software category called “data privacy management.” This software category has grown by 46 percent in 2021, according to IDC, and it provides companies with the tools they need to manage customer PII and enable customers to control and delete what is collected about them.

Privacy’s Future

Every company must strike the right balance between privacy and value. Customers are willing to give up their data if they receive something of value in return. Customers will leave brands they don’t trust or who deceive them regarding how their data is being used.

Reputation isn’t the only reason to stay on top of poor data-privacy practices. Fines for not being compliant with regulations such as the GDPR have risen by 113 percent over the past year.

Good data-privacy standards and practices are good for business. They build trust and long-term relationships with customers. They keep you in compliance with national and state data-privacy regulations and provide a value-added differentiator to your business that shows the world you care about your customers, their data, and their needs.