Source: Pew Research Center
As if marketers don’t have enough to juggle, they face numerous risks around security and data privacy—both from consumer and compliance perspectives—that are important to understand. In fact, Gartner reports one out of five marketers report privacy compliance as their main concern across marketing channels.
Today’s consumers willingly share their data—with the expectation companies will protect it and use it to deliver relevant experiences unique to them. McKinsey & Company reports 71% of consumers expect companies to deliver personalized interactions and 76% get frustrated when this doesn’t happen. Marketers must find a way to woo customers with meaningful data-led interactions while, according to Pew Research Center, 86% of U.S. citizens have attempted to remove or decrease their digital footprint online.
Data privacy research from the Kellogg School of Management at Northwestern University concluded companies need to be aware of a wide range of risks when data privacy isn’t managed and executed properly:
Effectively managing security and data privacy is complicated. In fact, HBR reports 90% of current IT budgets are spent on trying to manage internal complexities, leaving little to spend on improving productivity and the customer experience. Here are just a few of the challenges companies face while protecting their customers’ data.
Companies need zero- and first-party data shared directly from customers to deliver personalized experiences—but consumers are becoming more and more concerned about their privacy. With Google phasing out third-party cookies, loyalty and referral programs have emerged as essential strategies to collect consent-based customer data as they deliver meaningful value.
Golden customer records are the gas that fuel marketing performance. But Gartner reports 73% of marketers fear that privacy concerns will have a negative impact on their ability to effectively analyze data and gain useful insights. And misusing data can seriously damage a brand’s image, not to mention send customers to competitors.
It’s essential to adhere to data protection laws and regulations. Not only do you need to be aware of and adhere to platform and browser regulations, such as Apple’s privacy changes and Firefox’ enhanced data privacy, you also need to comply with country-specific data regulations, which all vary. Gartner reports 65% of the world’s population will be covered by privacy regulations by 2023. It’s also important to ensure the data you’re collecting isn’t invasive and doesn’t threaten your customers’ privacy and security.
According to Harvard Business Review, most companies now have a Chief Information Officer responsible for collecting, encrypting and securing data—in other words, keeping customer data close to the vest. Conversely, the Chief Digital Officer is charted with mining and modeling the data, and ultimately pushing it out to entice prospects and customers to act and purchase. And let’s not forget the Chief Data Officer, Chief Information Security Officer, and Chief Privacy Officer. These multiple roles can create internal conflict around how to integrate, leverage, and protect customer data across your organization.
Compliance can be part of your brand’s core values and a key differentiator, as Gartner predicts consumers will seek out and favor “privacy-first” products, similar to current trends around organic and sustainable products.
“To increase customer trust, executive leaders need to build a holistic and adaptive privacy program across the organization and be proactive instead of responding to each jurisdictional challenge.”
Bart Willemsen, Vice President & Analyst, Gartner
How well you comply with data security and privacy best practices and regulations impacts your brand image—with customers, employees, the media, and the government. Transparent, responsible data management can help drive advocacy, as you demonstrate daily that you value your customers’ privacy and safety.
(Source: Survey by Cisco & HBR)