27/01/2015

By Nigel Goldthorpe, Managing Director, PDV DLG

We have come a long way since the days of mass advertising that was difficult to target and even more difficult to measure. Over the last two decades we have been preoccupied with refining our marketing approaches by gathering customer data on and offline, to help us target and communicate with customers and prospects better. We also have access to increasingly sophisticated and precise third party databases that we can tap into when we want to acquire new customers. So news that there was pending EU Legislation that could affect how we use these valuable marketing channels has been met with a less than enthusiastic response.

While some have been avidly following the long journey of the legislation, for many the pending EU Data Legislation has crept up unnoticed or has been mistakenly dismissed as a problem being faced by only the largest organisations. The finer details of the legislation are still to be clarified, but what is certain is that almost every organisation is standing in the path of an unstoppable train that will have an impact on their business. With proposed fines of up to 1 million euros or 2% of business turnover for businesses breaching the rules, businesses are suddenly sitting up and taking notice.

So who will the proposed legislation affect? Put simply, any organisation that collects, uses or purchases customer data. Whether that’s gathering customer information as part of the sales process, tracking consumer behaviour online or even purchasing customer data for customer acquisition purposes. The wide remit of the legislation means that every business large and small is caught in the net and needs to prepare. The timelines for the legislation are still not confirmed but it is increasingly imminent so businesses need to act now to understand how it will impact them rather than find out some of their valuable marketing channels are no longer viable after the introduction.

For many businesses direct response channels such as direct mail and online channels are the lifeblood of new customer acquisition, as well as customer retention and upsell / cross sell opportunities. So how can you prepare for the new legislation and ensure you can still reach your customers and prospects in a targeted and effective way? The best way to start is to carry out an audit of your current practices. Examine how and where you collect customer data. Do you collect customer information as part of the sales process? Do you collect data via your website? How do you store the data and for how long? Once you have a clear visibility of how and why you collect customer data you can put in place practices to ensure the data is fully compliant and future-proofed. It is also worth considering how you purchase data for acquisition purposes. Even though the data is not actually yours, any issues could reflect badly on your brand and ultimately your bottom line, so it’s worth checking the compliance credentials of any suppliers.

So what in principle will the law require you to do? It is proposed that you need to obtain explicit consent from the customer to use the data and be very clear about what you intend to use the data for. Once the law comes into effect you will only be able to use the data for the purposes you outlined at the point of consent. Importantly you will also be required to store data for a reasonable amount of time after which you will be required to dispose of the data. So in a nutshell, companies need to look at how and where they are collecting and using data, they need to have a clear plan about what they want to use the data for and ensure this is clearly explained at the point of opt-in.

Clearly there is a lot more detail involved and as the date is announced some more clarity can be expected but it’s important to get prepared now if you don’t want to get caught out.

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