A Lifetime Marketing Analysts Perspective on Consumer Data Privacy
Updated: Jan 19, 2021
In today’s business environment, more and more companies are adopting customer-centric business practices. According to marketing and CX experts Don Peppers and Martha Rogers, the authors of Managing Customer Experience and Relationships, customer-centric businesses ensure that the customer is at the center of a business philosophy, operations and ideas.
From my perspective, these customer-centric practices provide benefits to both consumers and businesses. Consumers benefit from companies setting up processes to listen to their needs and using analytics and insight-driven approaches to modify their business operations to improve the overall customer experience. Businesses benefit from implementing customer-centric practices by building consumer trust, value and brand loyalty and by gaining more consumer advocates. I will once again cite Don Peppers and Martha Rogers to highlight some of the core traits of customer-centric businesses:
They collaborate with customers
They use interactive communications to determine individual needs
They differentiate customers from each other to interact with consumers in a more relevant, customized manner
So what does this have to do with consumer data privacy you ask? Everything.
Consumer data and feedback resulting from interactive communications with consumers is the fuel that enables businesses to adopt and implement innovative customer-centric practices. Without this data, businesses are blind to the ever-changing behaviors, preferences and needs of consumers.
Therefore, it is critical that all businesses incorporate consumer data collection practices that encourage consumers to keep this pipeline of customer data flowing into businesses. The data collection and usage practices need to be completely transparent to consumers. These practices need to protect against data breaches and give consumers a greater level of control over what personal information is collected, stored, used and shared by businesses. Without this, there will be more cases like Cambridge Analytica's misuse of Facebook member data for political campaigns that continue to erode consumer confidence and advance the perception that companies cannot be trusted to keep consumer data private and secure.
I also believe that marketers need to be very thoughtful about how they use the data and insights to communicate with consumers. They need to put themselves in the shoes of the consumers. Do you like being retargeted for an item you abandoned in an online retailer cart via Facebook messenger? Maybe, if the retargeting message comes with an enticing offer. The point is that some consumers will be comfortable with retargeting tactics and others will feel they are too intrusive and creepy and show their disapproval by taking their shopping elsewhere. If businesses want to truly improve the customer experience, they need to figure out solutions that make all customer segments comfortable with how their data is being used.
The European Union (EU) has their own approach to regulating consumer data privacy. As of May, 2018 all retailers doing business with EU citizens must adhere to the laws outlined in the GDPR (General Data Protection Regulation). These laws set a new data privacy standard for this region and provide consumers with much greater access and control over the personal data collected by businesses. The first major infraction of the GPDR was levied against Google this month by a French regulator accusing Google of securing “forced consent” to collect their personal information. That is, consumers would not be given full access to certain Google apps if they did not consent to their data collection practices. Not a good look for Google and another potentially damaging incident for those companies that implement responsible data collection practices and rely on this data to operate their customer-centric businesses.
Also, more close to home, the California Consumer Privacy Act of 2018 was signed into law in June, 2018 which will give CA residents greater control over the personal information that is collected and used by businesses starting in January, 2020. This shows that if U.S. businesses can’t self-regulate responsible consumer data collection and usage practices, then state and federal agencies will eventually do it for them.
Regulated data protection can be a bit of a double-edged sword for consumers. It certainly provides peace of mind to know that greater data protection practices are in place and being enforced. However, if the regulations are too onerous and restrictive then businesses will quickly begin to lose their ability to stay tapped into the behaviors, needs and voice of the consumer and this will impede the implementation of customer-centric business practices that benefit all consumers.
As someone that has worked in the marketing and data analytics field for 30 years I understand the value that responsible data collection and analytics can provide to both consumers and businesses. It is time for all businesses to assess their own data privacy and usage policies and make changes, if necessary, so we can begin to regain the trust of consumers.
I welcome your thoughts and comments. Also, see what Apple CEO, Tim Cook and Acxiom (data broker) are saying about data privacy.