Privacy remains a big deal and there are several reasons why consumers may be hesitant to allow organizations to master their personal data.
Organizations keep records on consumers for various reasons, among them, personalization, service, marketing, compliance and fraud prevention.
They may use your data to personalize your experience with their products or services; using your browsing and purchase history to recommend products that you are more likely to be interested in.
Keeping records of your interactions with customer service teams enables them to provide better support in the future and ensure that needs are met quickly and efficiently.
Marketing campaigns may be annoying but when they are personalized there may be a change in perception. Analysing behaviour and preferences, marketeers can create more relevant and targeted advertising that is more likely to result in a conversion.
Especially in financial services, organizations need to keep records on consumers to comply with legal and regulatory requirements. For example, they may need to keep records of your transactions for tax or accounting purposes but also to minimize the likelihood of money laundering or illegal use of financial instruments and infrastructure.
In exchange for goods, services or funding, they may use consumer data to prevent fraudulent activity.; monitoring behaviour, usage profiles and transactions, they can identify suspicious activity and take action to prevent fraud.
On the flipside, consumers may feel that their personal data is sensitive and should be kept private.
They may worry that if an organization masters their personal data, it could be used for nefarious purposes or sold to third-party companies without their consent.
Consumers may also be concerned that if an organization masters their personal data, it could be at risk of being hacked or stolen by cybercriminals, resulting in potential identity theft, personal financial loss, and other undesirable consequences.
One of the reasons is that consumers feel that if an organization masters their personal data, they lose control over it; worrying that the data will be used in ways they do not approve of, or that they will not be able to access or delete their data as they see fit.
In particular, consumers worry that their personal data could be used to discriminate against them based on their race, gender, religion, or other personal characteristics. Personal data that is used to make decisions about who to hire, who to offer loans to, or who to market products to are undesirable uses of personal data, for consumers at least.
Consumers have long held feelings that if an organization masters their personal data, it could also lead to unwanted intrusion into their personal lives accompanied by constantly being targeted with ads or other forms of marketing, based on their behaviour being monitored and analysed in ways that feel intrusive or uncomfortable and an invasion of privacy.
Zero party data
An opt-in approach with first-party data can help to address some of the concerns that consumers may have about their personal data being mastered.
First-party data refers to the information that consumers willingly provide through interactions with a website, a product, or a service. An opt-in approach means that organizations only collect and use the consumer’s data with the explicit consent of the consumer. This can give consumers greater control over their data, and can help to build trust between consumers and organizations.
Those privacy concerns can be addressed through opt-in meaning consumers must explicitly agree to allow the collection and use of the data in specific ways. This can give consumers greater control over their personal information and can help to ensure that their data is being used only for legitimate purposes.
By limiting the data that is collected to only what is necessary for specific purposes, the opt-in approach with first-party data helps to reduce the exposure risk associated with prospective data breaches. Organizations that collect first-party data are often also more invested in protecting that data, as it is valuable for building and maintaining the customer relationship.
An opt-in approach also gives consumers more control over the personal information allowing them to choose which data to continue to share, and supporting opt-out of specific data and its collection at any time.
To reduce the risk of discrimination, organizations are required to obtain explicit consent before collecting data on personal characteristics and though data is typically used for personalization and targeted advertising, the consumer can decide how it should be used especially in relation to important decisions about the consumer.
An opt-in approach with first-party data also helps to reduce the feeling of intrusiveness. Consumers now have control over what data is collected and how it is used, the personalization and customization can enhance the user experience rather than detracting from it.
If an organization is considering implementing a customer master data management solution, it’s important to understand how this approach can address consumers’ concerns about their personal data.
Through increased transparency the CMDM provides greater transparency into the data that an organization collects and how it is used; this in turn builds trust with consumers, as they can see exactly what information is being collected and why.
By centralizing the customer data in a CMDM and implementing robust security measures, a customer master data management solution reduces the vectors and edges that provide risk in the event of data breaches. This can also provide reassurance to consumers who are concerned about the security of their personal information.
A CMDM also enables organizations to provide more personalized experiences to customers which in turn helps to build stronger relationships with customers, increases loyalty, and ultimately drives revenue growth.
An opt-in approach gives customers more control over their data, the CMDM can demonstrate that the organization respects the privacy of its customers. This is often a important differentiator in the competitive marketplace, where consumers are increasingly concerned about their data privacy.
CMDM also helps with compliance. Organizations need to comply with data privacy regulations, such as GDPR and CCPA. CMDM’s like that offered by Pretectum, can help to avoid legal and reputational risks associated with non-compliance by providing reassurance to customers and regulators that consumer data is being handled in a responsible and compliant manner.
Overall, a customer master data management solution can help to build trust with customers, enhance data security, deliver better customer experiences, and demonstrate respect for privacy and compliance with regulations.
Communicating with customers about how their personal data is being collected, used, and protected is increasingly important in good customer relationship management.
Consumers expect organizations to be transparent about the data they collect and how it is being used. They expect clear communication on the purpose of the data collection, and what benefits the customers can expect from it. They also expect to provide customers with easy-to-understand information about their data rights and options for managing the data.
Organizations would reassure customers that their personal data is being stored and protected securely, explaining the measures they have put in place to safeguard against data breaches, such as encryption, firewalls, and access controls.
Using an opt-in approach to data collection, means that customers have control over the data that is collected and can choose to opt out at any time. The benefits of opting in are of course more personalized experiences or access to exclusive offers.
Emphasizing respect for privacy of customers and a commitment to protecting personal data go hand in hand and would also explain compliance with relevant data privacy regulations. The responsible organization also highlights any certifications or standards they have achieved in in relation to governance and compliance regulation adherence.
The benefits that customers expect from the data collection might seem obvious such as an enhanced overall experience, but providing examples of how the data is being used to personalize products and services, improve customer service, and offer tailored promotions and discounts is important communication.
Overall, effective communication with customers about the implementation of a customer master data management solution is most critical to building trust and addressing concerns.
Transparency on intent and behaviours, emphasizing data security and privacy, using an opt-in approach, highlighting customer benefits, and complying with relevant regulations, organizations can reassure their consumers that their personal data is being handled responsibly and ethically.
In response, consumers should engage in self-service zero-party data and consent inquiries because it allows them to have greater control over their personal data and the experiences they have with an organization.
By providing preferences and consent, consumers can receive more relevant and personalized experiences, products, and services.
Ecommerce sites could show recommendations based on customer stated interests and preferences, health apps could provide workout plans tailored to a user’s fitness level and selected goals.
Reduced clutter in inboxes may make interactions with an organization more efficient and enjoyable and when accompanied by the ability to decide what information is shared with an organization and how it is used, feelings of more control of personal data and confidence that it is being handled responsibly may follow.
Keeping the interest alive
If the data is collected but not used, it should be securely stored and deleted after a reasonable period of time to ensure compliance with relevant data privacy regulations and businesses can incentivize consumers to provide their data in the context of self-service zero-party data and consent inquiry by offering exclusives, discounts, rewards and previews.
Offering exclusive content, such as whitepapers, eBooks, or reports only accessible to those who provide their data can be a powerful incentive, especially for customers who are interested in a particular topic.
Personalized discounts or coupons to customers who provide their data especially in retail could encompass discounts on next purchases based on stated interests or style preferences.
A free cup of coffee, for example, is obvious at a coffee shop but consider how Waitrose did the same for loyal card holders and how other retailers do the same for their loyalty scheme members. The offer of a free drink after a certain number of visits, with additional rewards for sharing preferences and feedback is an obvious option but the others are a little more subtle.
Giving customers early access to new products, services, or features if they provide their data like AMEX customers in association with events or event tickets is a great way to build excitement and loyalty among customers. Capital One and other financial institutions incentivize in similar ways.
Game or challenge e vents that encourages customers to provide their data like Pokémon Go, a 2016 augmented reality mobile game offers participants rewards for completing certain challenges. Additional rewards for sharing preferences and data is common with many card loyalty schemes as well as social apps.
In the end, it’s important to ensure that any incentives offered are aligned with the interests and preferences of customers, and that they are relevant and valuable.
Organizations today should ensure that they are transparent about their data collection practices and are respecting the privacy of their customers at all times.
Give customers the opportunity to self serve and drive first party data into the DNA of your business.
