How marketers can strike the right balance between data privacy and personalisation
All of us are now familiar by the cliché that data is the new oil. The generation, collection, storage and profiling of data has become super easy, inexpensive and fast. Because of this, consumers now exist in the form of cookies, device IDs, emails, mobile numbers, social Ids, etc. in the marketer’s database.
Multiple brands have multiple of our IDs through which they connect with us across multiple channels such as email, text messages, push notifications, phone calls, and many more. This inundation of so many messages has not only irritated the consumer, but many times key offers and relevant content also gets missed in the clutter. In parallel regulations like the GDPR in EU and the Srikrishna panel’s draft law in making for India are going to ensure that our relationship with consumers, from a marketing perspective, is consensual and compliant to the data guidelines.
With consumers on one side demanding us to be relevant and the regulators on the other side ensuring we are consensual and compliant – a big question in any marketer's mind is how do we strike the right balance and yet deliver on the return on marketing spend goals.
Explicit vs. Implicit
GDPR or any other such regulation doesn’t say you cannot collect data. It says it is fine to collect user data as long as it is done in a transparent manner, is well documented, and can be actively managed or deleted if need be. It makes consent active than passive. So you can only collect data that they have earned through explicit customer consent. So how can one incentivise the user to share more data about them?
Explaining the benefits
Personalised offers, exclusive rewards and access to decision-making tools by asking the user to opt-in in sharing the data to make their experience personalised. A good example is Disney’s magic band. Disney gives consumer the choice if they want to wear these bands as they enter any of its theme parks. By holding the magic band up to the sensors around the Disney facilities, the one wearing the band can have access to parks, check in at reserved attractions, unlock their hotel doors, and charge food and merchandise coupons. It uses profiling data gathered by its magic band to enhance customers’ theme park and hotel experiences and create targeted marketing. By gaining convenience and personalisation, the consumer will be willing to share their data.
The user has control over what / when they want to share
Create a digital privacy centre where customers can easily understand/manage their data choices with your entity be an organisation or government. Also maybe you don't need to collect all the customer data at once. You can collect key data fields like name/phone number. As you build trust with the customer, you can use your other touch points to enrich your databases. Lastly, the user should also have a "right to forget"where they can delete their data with your entity.
Like any other relationship, the marketer has to be consistent and coherent with their relationship on privacy with the consumer. Gaining consumer confidence about how the information was gathered, giving them control of their personal data, and offering fair value in return. E.g. Apple's strong privacy rules will boost goodwill and business.
Tech Vendors- Time to go to The Drawing Board
Vendors would also have to re-think how they collect, store, process, use, and monetise consumer’s personal information, and for how long they could retain such data. The kind of data these vendors collect can be largely bucketed into:
- First party(Self-reported) - Data fields like name, email id, gender, work/educational history.
- Digital Exhaust: Location/browsing history created when using mobile devices/web services or other connected services
- Profile data: Make predictions about individual interests/behaviours. For example, today you can tell a lot about a user’s behaviour depending on the apps she has on her mobile phone, blurring the classical lines of demographic targeting.
Now research shows, data that is predictive make someone uneasy, then it’s probably not very predictive anyways. So, profiling of consumers is the one that spooks the user most than first party or digital exhaust data. Hence, "Privacy by design" becomes imperative for software companies. They need to provide privacy controls to be integrated into the design of products and services. Even within an organisation, one needs to build access control on who can see what level of customer data and why. Building these checks and balances in the software would be necessary so that users can opt in or opt out of those databases. Constraints drive creativity and tech providers need to rethink their data infrastructure on how to comply with conscious consumer and a vigilant regulator.
Winning your customer
Marketers can also move to contextual advertising than profiling the consumer. Say if someone is on TripAdvisor showing relevant ads of flight details, hotel, holiday packages and things to do will garner higher relevance than any other ad. Another example is newsletters that several B2B companies share to build thought leadership. These are opt-in with a defined frequency and hence is delivered to the relevant audience only.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)
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