Data Privacy Best Practices For Insights-Driven Customer Experience



Nick Rudd
09/14/2016

Customer experience and marketing are increasingly becoming a data science. As the face-to-face interactions customers once had with brands becomes increasingly digital, data and how is the insights derived from this are being used have become critical to the future growth of brands across the world.

In a landscape saturated with offers, adverts, rewards and messages, competition between brands to win consumers’ attention and custom is fierce. This has driven the near universal push to provide even more personalised experiences.

Therein lies data’s importance. To create these personalised experiences we must be able to access the data that reveals the attitudes and behaviours of the customers. This insight, if used correctly, provides the opportunity to improve customers’ experiences and build long term loyalty and retention.

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However, with this opportunity comes a profound challenge. As our appetite for data grows so, too, do consumers’ concerns about how their data is being used. If we fail to address these concerns, we’re at risk of alienating customers before we can even start building relationships with them, let alone engaging them further through personalisation. According to our research, consumers are becoming increasingly defensive with their data. Half of consumers reveal that they are taking steps to limit companies from tracking them online by deleting cookies and disabling tracking in their web browser. When it comes to proactively sharing their data, it’s a similar story. We found that four in five people are only willing to disclose personal details with a limited number of companies.

So how do CX and marketing leaders engage with customers in a way that alleviates any concerns around data privacy, while improving their own marketing and the overall customer experience?

The Legal Implications of GDPR and Brexit

Clearly, marketers and customer experience professionals must first adhere to the spirit and letter of legal requirements. 2018 will see a major European watershed, as the General Data Protection Regulation (GDPR), agreed last year, comes into force. The European-wide regulation will supersede current national legislation and will grant greater powers to regulators.

The GDPR will apply until the UK officially leaves the EU and, whatever arrangements are made as part of Brexit, will continue to apply to UK businesses that process personal data when selling goods and services to EU markets.

However, further details surrounding how data protection will be affected by Brexit remain unclear. If the UK government opts to remain in the single market, it is highly likely that the stricter GDPR provisions will also be adopted by the Brits. However, an alternative trading relationship could see a more liberal set of rules being implemented, in line with the new government’s business-friendly strategies.

If the UK chooses to adopt legislation which is not considered ‘adequate’ by the EU Commission – as is the case with the US and Asia – negotiating a cross-border data flow will become a more complex operation than ever before.

4 Key Steps to Meeting Customers’ Expectations

While the regulatory landscape remains unclear, technology is driving change at a pace far exceeding that of the regulators. This raises new questions for brands, which aren’t necessarily answered by existing regulation. Marketers and CX leaders should re-evaluate their data privacy policy to ensure it meets customer expectations, which are just as likely to change with technological advances as they are with regulatory change.

This can be achieved by following a set of principles, which we refer to as TACT: Transparency, Added Value, Control and Trust.

Transparency is fundamental. Companies should provide their customers with information on the specific data being collected, the manner in which it is being collected and how it will be used. This information shouldn’t be disguised by jargon or hidden in the small print either, but should be presented in a format which is accessible and easily understood.

Added value refers to how sharing data improves the customer experience. Research shows that 41 per cent of respondents are happy to share their personal information, as long as they get something in return. This is demonstrated in many of the loyalty programmes operating in globally today. In the UK, Nectar’s app incorporates machine learning, which can understand the changing context around a member and can therefore tailor offers accordingly.

CX professionals should therefore make customers aware that they’re being compensated in a specific manner for providing personal data. Whether that compensation comes in the form of loyalty programme rewards, offers, partnerships or exclusive experiences, this value exchange needs to be explicit.

Yet for customers to be willing to share this data in the first place, they need to be the active partner in the brand/consumer relationship. They want control of the data-sharing process – and how that data will be used. Our research shows that 83 per cent of people would like to exercise greater control over what data companies hold about them. Clearly, a hard-to-find ‘opt-out’ button is no longer enough to keep savvy consumers satisfied.

Finally, as with people choosing a bank to entrust with their life savings or parents seeking childcare, the overarching consideration will be trust. Security is the primary influence in determining whether a company is viewed as a trusted one, which the customer is happy to ‘do business with’. If a consumer can look at a brand and think “I know that my data is secure with you and you will use it in the right way”, then you are winning the battle.

It’s clear that in order for data to deliver for the benefit of consumers, and ultimately the brands with which they engage, customer experience and marketing leaders need to take a long term, ethical approach to the valuable commodity of data that has been entrusted to us. There is a huge opportunity, but the eyes of the public are on you.