Customer Analytics and Data Privacy Laws: On a Collision Course?

As you reflect on the time spent in physics classes, you can remember what is known as Newton’s law of action and reaction. Simply put, in each interaction, a collision means that a force is exerted on the two objects in a collision.

As a result, CMOS knows more than ever about their customers and their future buying behavior.

Enter the age of privacy

Okay, right? Well, not if you ask the customer.

This step backward aims to determine exactly how customer reviews can deliver, respect your customers’ wishes, and obey the law. This kind of thinking could not have arisen before, given the public data privacy fines imposed on Google ($ 57 million) and Facebook ($ 5 billion).

With the growing need for companies to use customer data and analytics to promote their business, two areas have emerged: one that sees data laws and data privacy sanctions as a new cost of doing business and another that is the best way to do business.

The best way: customer analysis and privacy union – don’t conflict

Much has been written in the past year about how consumers should be the “owners of their data”. This essentially means that they, and not the companies that process your data, must have the final say on how the data is processed and by whom. More than anything else, this has been the model for how forward-thinking companies address privacy issues and, at the same time, manage to have an effective customer intelligence program.

But what does “ownership” really mean? It is a broad term that can mean a lot to many people. In terms of data privacy, this can be divided into three main ideas.

  1. Remove the caps and tell customers what you know

There must be an easy and accessible way for people to know what data companies have about them, how decisions are made with the data, and with whom the data is shared or sold outside the company.

Customers don’t always like what they see, but that openness builds trust. Facebook took a big step in that direction by announcing its browsing history privacy tool.

  1. Offers options for acceptance, not opt-out

Known as express or consent-based consent, opt-in individuals offer “ownership”, which means that they have more control over how their data is processed.

Again, it’s about building trust. When a company offers people the opportunity to join, they are informed and can take control of their privacy. Also helping to improve marketing: people who are open to sharing and their data being processed by a company indicate that they are interested in a commercial offering and are more likely to become revenue-generating customers.

  1. Giving Individuals the ‘Right to Be Forgotten’

Another important part of the GDPR is the possibility for individuals to have their personal data deleted: “The data subject has the right to have the individual’s data deleted without undue delay and the obligation to delete personal data without undue delay.”

Although most privacy laws worldwide do not extend to GDPR in terms of data exclusion rights, companies should consider this an option. Nothing offers a more sense of ownership of the data than the right to delete it. It also offers a direct benefit to marketing departments: the ability to know who doesn’t want to be your customer.

In sales and marketing, companies always want to know who their “yes”, “maybe” and “no” customers are. Whoever asks for the deletion of their data gives companies a gift: more time and effort to reach customers “maybe” and “yes”.

The “right to be forgotten” must be seen as a win/win for everyone involved.

The way forward

Combining a customer information program with data privacy has become more than just an objective – many companies in all sectors have made it their core business. However, it did not come without challenges. How early users face challenges has become best practices for others who want to reconcile data collection and use with customer privacy.

Some of the most important best practices are:

  • Marketing or IT cannot just monitor data privacy; all departments that work with personal data must be involved.
  • Each employee must understand their role in protecting the privacy of their customers’ data and how best to fulfill that role. Data privacy is not just about technology.
  • Businesses should review their current data management framework and do everything possible to make data privacy part of data management, rather than having separate data and privacy management programs.
  • All technological considerations for a customer information platform must include – at a minimum – data access, data quality, data management, and audit capabilities.

CMOs’ desire and ability to learn more about their customers will continue to grow. However, learning more about customers requires an understanding of companies’ concerns about customer privacy needs and the consequences of not meeting those needs.

Customer analysis and data confidentiality need not be two opposing forces colliding in opposite directions. Customer analysis benefits from data privacy; customers benefit from applications that provide the best data experience.

This is the way forward for business today and tomorrow.