If Your Approach to Data Privacy Is the Bare Minimum, You’re Doing it Wrong—Here’s Why
Experts predict data privacy regulations, like the European Union’s General Data Privacy Regulation (GDPR) and the California Consumer Privacy Act (CCPA), are still in their infancy. High profile data breaches and scandals have increased consumer awareness about data privacy and security risks and rights—and a new era of privacy legislation is on the horizon.
What does this mean for digital marketers? When marketing success depends on highly personalized campaigns, can protecting customer privacy work in your favor? Or will it cripple your efforts?
Forrester Research Principal Analyst Heidi Shey recently shared her point of view in an insightful webinar:
“Privacy is about people. It’s about doing the right thing to protect and respect their rights…. Meeting and exceeding what’s required by compliance is not only going to help sustain you over time, but better set you up for success.”
—Heidi Shey, Principal Analyst for Forrester Research
Shey argues that new privacy laws don’t have to hinder effective marketing. In fact, leaning into data privacy protection is a great business strategy. Here are three reasons why.
#1. Data privacy and security has never been more important to consumers
Consumers’ mistrust of brands has developed over decades. Consumer-data gathering started back in the early ‘90s with simple cookies that enabled companies to track website visitors. Soon, third-party cookies were gathering huge amounts of sensitive data about consumers’ online activities and sold as a commodity. Subsequently, consumer data was treated carelessly because it was disconnected from the real-life humans it represented.
In an Inc. article, Kevin Cochrane, CMO of Jahia, said: “In 2015, consumers woke up and realized they were targets; that enterprises were collecting more data in more silos and yet they had no idea what data was being collected, why it was being collected, how long it was being maintained nor how it was being used for their benefit.”
In this environment, regaining consumer trust is no small feat. But it’s essential in today’s marketplace. As the pandemic pushes consumers to embrace online shopping to stay safe, they’re reexamining the tradeoffs of handing over their personal data for convenience. As they do, only 17 percent say that they trust brands with their personal data. Compare this to 54 percent of consumers, who in the same survey, said they are willing to share their data if it helps with tracking and tracing coronavirus contacts.
Finding the right balance between privacy protection and data collection can distinguish your brand and help you capture market share. Moreover, it’s the key to attracting some of today’s most valuable consumers. In a 2019 survey, consumer actions—not just attitudes—were queried with respect to data privacy. Notably, the survey found that 32 percent of respondents not only cared about privacy, but they were willing to proactively protect their privacy by switching brands or providers when they disagreed with data policies.
This group of respondents tended to be younger and more affluent. And they were more likely to shop online and use social media frequently. They viewed respect for privacy as a core value of the brands they were loyal to. Moreover, 90 percent expressed the belief that the way brands treated their data reflected the way they were treated as customers. In other words, customers increasingly assume that if you don’t care about their personal information, you don’t care about them.
#2. Protecting data privacy is a brand differentiator
For a good example of privacy leadership, take a look at Apple. The company has stated that it regards privacy as a human right, and it has made privacy one of its main selling points to justify its premium price. Every day iPhones process millions of highly sensitive interactions for users, including GPS coordinates, business and personal messages, health data, and financial transactions. Not only does Apple provide built-in tools to control data sharing, it’s also transparent about where data is shared. With Apple Pay, for example, it discloses the financial institutions where transactions are shared and then provides a tool to opt-out.
On several occasions, Apple has even made headlines with its privacy stance. In 2019, it revoked Facebook’s Enterprise Developer Certificate for misusing it to distribute apps to consumers for data collection purposes, which essentially shut down all of Facebook’s internal apps, including iOS versions of Instagram and WhatsApp. A short while later, Apple revoked Google’s enterprise certificate for violating privacy. Recently, in June 2020, Apple announced that in order for advertising to track users, apps like Facebook and Google will need to ask users to opt-in.
With these actions, Apple’s position in the market as a defender of user privacy was solidified. And it makes good sense—without trust, Apple’s relationship with users would fall apart. Even if your organization doesn’t collect excessive amounts of personal user data, consumer trust is still essential to staying in business.
According to Shey, the value of data privacy to your customers really all depends on expectations. “Privacy is not dead. It’s not a binary thing where people either care or don’t care…. People’s expectations for privacy can change across different experiences and different types of interactions. Our expectations for privacy with our employer are going to be different from what we have with a retailer…versus when we’re at the doctor’s office… So much depends on the relationship.”
#3. It comes down to customer experience
Data privacy is as much about customer experience as it is about privacy and security itself. To gain loyalty and trust, you need to demonstrate to your customers that privacy matters as much to you as it does to them.
Don’t know where to start? Kick off your privacy efforts by approaching your customers for input. Think about it—brands routinely seek customer feedback about their products and services, yet they almost never ask about views on data privacy. Asking your customers pivotal questions about the data they share and the value they receive in return, you’ll gain insights about how your customers view your privacy policies and what they might view as fair compensation for the use of their data.
Transparency is also essential. Language in privacy policies and terms of service should be shortened and simplified to clearly explain the data you are collecting and why. Consumers should be able to read it in two minutes or less. You need to set clear expectations about what consumers can expect in exchange for their data, such as discounts and services. The main point is to be fair while actively demonstrating that you’re a reliable data steward.
And you should put the right technology in place. This means providing customers with tools such as a personal privacy page where they can manage and view their data profile. You also need internal tools, like a customer data platform, to make sure to implement every privacy request moving forward.
A Marketer’s Guide to Protecting Customer Data
While many marketers may think new data privacy regulations spell doom and gloom for their future, ultimately, embracing privacy as a strategy will lead to more contextual offerings and an overall happier customer.
“Privacy is about doing what’s right—for individuals, for your customers,” says Shey. “It’s about respecting their privacy and handling their data with care. By doing that correctly, you’ll naturally meet the different requirements under new privacy regulations.”
To learn how data privacy and security can increase customer trust in your brand, watch the webinar, “A Marketer’s Guide to Protecting Customer Data.”