Every business collects data. Throughout the customer journey data will be gathered: everything from a customer’s profile to their purchasing habits. When combined with big data sets, businesses can gain a competitive advantage through the analysis of this data to gain insights. Insights that will influence their business strategy and marketing plan.
Using data comes at a cost though, and that cost is loss of consumer trust. Individuals are a lot more cynical about commercial organisations these days, born from data breaches and uneducated marketing campaigns. They believe an increase in profit without any consideration of their privacy remains the main objective of big business. Even back in 2014, The Future of Digital Trust report, by Orange, showed that 78% of consumers thought that it’s hard to trust companies when it comes to the use of their personal data.
Everywhere you look online, we are surrounded by marketing messages. Social media channels are now heavily promoting ‘paid for posts’. Web activity is tracked, actions are analysed and profiles used for commercial purposes. Consumers are targeted based on the personal data they have freely given away. But this is changing. People want to protect their privacy and guard the data they share.
Even though trust is low, the commercial pressures of business mean that instead of considering the underlying cause of distrust, businesses deploy advanced marketing strategies and sophisticated tactics to circumvent this cynicism. This reinforces the public’s belief that profit is put before privacy.
In September this year, the Chartered Institute of Marketing released a report ‘Whose Data Is It Anyway?’. The findings show that just 8% of customers understand where and how organisations use their personal data and 31% don’t have a clue. It is clear that they are not feeling reassured. Significantly, 68% of consumers feel uncomfortable sharing data from their social profile. Yet 44% of marketers claim to collect data from social media.
In May 2018, this will all change with the introduction of the General Data Protection Regulation. This EU legislation, which will be in place before Brexit is finalised, is more stringent in terms of how organisations use data. The legislation enshrines the fact that an individual’s data belongs solely to them, unless they grant explicit consent for its use. They have the right to know exactly what data an organisation stores and how their data is used. They also have a right to be invisible.
This regulation is onerous for business, and what’s even more worrying is that currently some organisations don’t seem to comply with the current Data Protection Act. In the same CIM report, 41% of marketers admitted that they don’t fully understand the laws and best practice around using consumers’ personal data. 70% said they would put their organisation first in overstepping the mark with data use, and not the trust of their consumers.
While regulation should not be the driver for change, it certainly focuses the attention. Business has until May 2018 to become fully compliant, but there’s an opportunity to do so much more.
Now is the time to get your data in order. To have a platform where you can engage with your customers and give them back control of their data. Where you can demonstrate the value exchange between you and them. And, of course, where you can be transparent about the data you hold, use and share with their explicit consent. Where informed insights are gained from informed consent.
When you look after your customers, when you use their data to give them value, not just for their own benefit, but for the benefit of society as a whole, trust will be re-established and a deeper relationship can be formed. A relationship that will profit everyone, in every sense of the word.
by Keith Dewar, group marketing and product director, MyLife Digital