At a time when consumer trust is at an all-time low, businesses must take a proactive approach when it comes to data privacy and compliance. Not only are consumers becoming more concerned about their personal data being harvested for commercial gain, but governments around the world are passing stringent legislation around the gathering, storage and use of data.
High-quality consumer data can only be derived from real human experiences, and having access to such insights is now considered a privilege. The Economist even described data as the world’s most valuable commodity, and two years ago anticipated the regulatory changes currently taking place: “A new commodity spawns a lucrative, fast-growing industry, prompting antitrust regulators to step in to restrain those who control its flow.”
The rapid rise of consumer data has led to a range of third-party data vendors that prioritize volume over quality. This practice is now losing its competitive advantage, as it leads to inaccurate targeting and negative consumer sentiment. Enter declared data – a type of first-party data that is now considered the gold standard of consumer data as it is derived from direct, real experiences between consumer and brand.
Smarter marketers who shift towards this valuable data type are able to provide more targeted, highly relevant and exceptional customer experiences that deliver greater business results. Leveraging declared data not only increases trust between brands and consumers, but it protects businesses from increasingly strict governance – especially relevant for companies that cross borders with various regulations with which to comply.
Australian privacy laws were tightened with the Notifiable Data Breaches Act 2017, while the EU General Data Protection Regulation (GDPR) came into force in May 2018. Another major step in the same direction is the California Consumer Privacy Act (CCPA), which will come into effect in 2020. It is designed to force companies that conduct business in the State of California to implement structural changes to their privacy programs.
The CCPA is significant because it gives consumers the right to delete data that is held on them. Conditions including minimum revenue and data sources make this law applicable to around half a million companies in the US alone, not to mention overseas and global organizations transacting in California. It’s also likely that the US will pass federal data privacy legislation, widening the restrictions.
This law will specifically target purchased data: second and third party data – making first-party, declared data all the more valuable. As we already know, this type of data is essential in order to provide the personalized experience that consumers expect. At the same time, businesses need to be aware of consumer concerns about the collection and selling of personal information without explicit permission – an issue for 95% of respondents in one survey. Concerns about online privacy are also growing.
Ideally, marketers shouldn’t be playing a game of “catch up” with the latest laws. They should be working from a set of ethics and policies that are already in alignment with the global shifts that have taken place. To support the movement towards tighter data privacy laws, businesses should remember:
- Clarity is key – it’s vital to be transparent around how your business uses personal information in order to promote consumer trust.
- Value exchange is imperative – consumers need to be given the opportunity to provide their data, and to receive a more personalized, relevant experience in return. Ensure that there are clearly defined benefits for participating in that exchange.
- Ongoing conversations with customers are vital. Fresh and relevant data – and therefore more useful and valuable – needs to be continually captured and updated.
By listening to customers and providing an ongoing, open forum of engagement, businesses will also gain insight into questions they may not have thought to ask or insights they may not have anticipated. Critically, they will promote consumer trust, which is the key to the privilege of consumer data.