Data privacy has become an integral part of the marketing landscape for enterprises. Consumers in 2021 have become more aware of how their personal data is being used by brands. A perfect example of this is the severe backlash that WhatsApp was subjected to when it recently revealed its updated privacy terms and policies.
It’s due to this increase in consumer concerns regarding data privacy that governments have implemented privacy regulations such as GDPR (General Data Protection Regulation) and the California Privacy Rights Act (CPRA). Regulations such as these are meant to safeguard consumer privacy and severely punish those companies that are found to be violating them. CPRA directly calls for companies to minimize data collection and give users the right to opt-out of the sale or sharing of their personal information.
Turning Data Privacy Into a Competitive Advantage
Companies that act at the right moment and the right time are the ones that have an immense potential for success. As the saying goes, the Customer is King. If the customer is having concerns about data privacy, why not address it outright and get into the good books of the customer? This is what tech giant Apple did recently.
The most valuable company in the world released a new suite of privacy-maximizing features. This included a sign-in with Apple feature that enabled users to log in securely to apps without sharing their PII (Personally Identifiable Information) data. The company’s privacy page was modified to highlight to consumers how each of its apps are designed with privacy in mind.
The tech giant’s strong privacy commitment enables them to comply with the latest CPRA regulations which is not the case with its competitors. As a result, Apple could reinforce and increase the level of consumer trust in its brand. The company’s privacy-focused approach has been an eye-opener for the IT industry as a whole that has largely profited from consumer data.
If other enterprises can follow a similar strategy such as Apple, data privacy can itself become a competitive battleground in winning customer loyalty and advocacy.
The Data Privacy Approach for Enterprise Marketers
A recent report by Salesforce revealed that the fear of personal data being compromised was increased for 61% of consumers in the last two years. Another IBM survey found that 85% of consumers expected businesses to put in more effort into safeguarding their valuable personal data.
So how can enterprise marketers especially in industries such as Financial Services go about doing this? What is the data privacy approach that they can adopt?
1. What Data is Being Collected
Consumers want to know what data is being collected. They want their brands to ask for their permission before using or sharing their data. In short, they need more control over their PII data and marketers should definitely heed this demand by getting their permission.
2. Why the Data is Being Collected
As a follow-up to the previous point, consumers want to know why their data is being collected. How will it be used? What’s in it for them and the brand? What are the benefits? Enterprise marketers should clearly communicate the answers to these questions in a way that satisfies the consumer. It shouldn’t be a generic reply. It should be specific and to the point and explained in simple terms for consumers to understand.
3. The Role of Marketing
The marketing department should take ownership of how consumer data will be used, stored, and shared. In addition to getting the users’ consent and communicating how the data will be used, enterprise marketers need to consolidate and unify their data from data silos and manage it in a centralized location. This is where the role of martech tools such as a Customer Data Platform (CDP) plays a vital role.
CDPs can assist marketers in dealing with and managing sensitive PII data. It also conforms with all the data privacy requirements levied by GDPR and CPRA. As a CDP aggregates and unifies customer data in one central location, it creates a single unified view for each individual customer. This view helps marketers in clearly understanding customer needs and wants. It, therefore, helps them in devising the kind of personalized value that customers expect from them by sharing their personal data.
Consumer trust is at its lowest point right now. Data privacy scandals such as Cambridge Analytica, Equifax, etc. have left them angry and skeptical in trusting enterprises and their governments. To regain their confidence, marketers need to follow a data privacy approach in their businesses. By being more transparent in how customer data is collected & used, and getting the consent and permission from customers themselves, enterprises can definitely turn data privacy into a competitive advantage.
By Bijoy K.B | Senior Associate Marketing at Lemnisk