By Luc Burgelman, CEO and co-founder of NGDATA
Back in May earlier this year, the General Data Protection Regulation (GDPR) came into effect.
However, the effect it had on organisations in the lead up to its implementation had executives from all sizes and types of organisations quaking in their suits.
Designed to bolster and bring together regulations involving data within the EU, the new data-related regulation aims to provide consumers with greater control, privacy and transparency over their personal data. However, it already appears that organisations are falling at the first hurdle, with Facebook and Google both having complaints filed against them, which could potentially result in more than £3bn in fines.
In the lead up to the implementation of GDPR, organisations have been spending millions of dollars on GDPR-related technologies, ramping up their legal budgets, and some even going as far as to consider doing away with customer data altogether in order to avoid added cybersecurity complexities and potential legal complications.
The widespread fear over the GDPR deadline was (and still is) largely misguided, however. When adhered to properly, GDPR can create a mutually beneficial exchange between companies and their customers. More specifically, it can drastically improve customer interactions by providing customers with explicit choice over their preferred experiences. By enabling companies to accumulate and apply more accurate and insightful customer data overall, GDPR can provide infinite revenue-generating opportunities for businesses over the long term.
But the biggest – and perhaps not the most obvious – benefit of GDPR is that it’s allowing companies to start a trusted dialogue with their clients, thereby creating a standard framework for data privacy.
Putting data front and centre
Right now, there is no standard between organisations and customers on how to manage data privacy, resulting in a lack of transparency between parties on what either is doing in this regard. This leads to inefficiencies (and missed opportunities) in how data is managed, and it also creates mistrust between parties.
The data privacy framework should clearly outline and provide a standard for how a company is equipped to protect its customers’ data and privacy while also offering a way for customers to inform a company about what data they’re permitted to use. It’s also important that this framework references all types of data marketers use to attract new customers, including first-party data (i.e., customer and prospect information collected directly from all channels), second-party data (i.e., partners’ first-party data) and third-party data (i.e., data sold by data management providers and data service providers).
To establish a data privacy framework, you need to first start a dialogue with your customers to let them know your company takes their privacy very seriously and has the processes and systems in place to ensure their data remains private. Customer trust is all about transparency, and that starts with clear, timely and consistent communication. In today's digital world, this can be done via myriad channels (social, email, virtual assistants, video, etc.) to show customers that they are top of mind in the eyes of your company, which leads to improved customer satisfaction and loyalty.
To approach GDPR as a revenue-generating opportunity, it behoves companies to manage their customer data from one integrated system. In doing so, companies can more easily and efficiently manage customer consent, as mandated by GDPR. For instance, marketers can quickly reference how and when a specific customer’s consent was obtained and for how long and for what purpose the consent is valid. Should a customer decide they no longer give consent for a particular activity, marketers can more easily manage the changes in use for that customer data.
Centralising the management of customer data can also empower companies to build detailed profiles of each individual customer. Proactively applying these profiles can significantly improve customer experience initiatives and incorporating machine learning and prescriptive analytic technologies can enable perpetual, real-time profile updates. For customer-facing organisations, such as Telco’s or financial services companies, establishing holistic views of individual customers is critical. For example, recent research indicates that more than 40% of consumers cite bad customer service as the reason they would switch to a new bank. Furthermore, customer service nearly ties cost and fees as the key factor leading to banking customer churn.
A journey towards mutual trust
The reality is, all customers want trust and control over their personal data, and this is precisely what GDPR is enabling. If companies can move past viewing GDPR as an expensive, overwhelming hurdle and instead view it as an incentive to give customers what they want, both sides stand to benefit. With customers knowing exactly how and why their data will be used (since they have the right to give or reject consent before any information can be used under GDPR), they’ll likely be more open to sharing their information with companies moving forward. And with more focused, meaningful customer data available, companies can become more knowledgeable about each customer and use that information to create more relevant interactions and offers.
While GDPR is the first big step toward improving data privacy and customer trust, it’s not by any means the final solution. It’s akin to the Dutch saying, “The soup is never eaten as hot as it is served.” In other words, achieving GDPR compliance and ultimately total data privacy is going to be a process – probably a long, laborious process one – but this is the catalyst for companies to create the framework.
Let me put it like this. Customers want GDPR and more control over their data. Organisations say they want to serve customers. So why is there a discrepancy? Organisations need to stop viewing GDPR as a hindrance. We need to start looking at it as an opportunity. It is there to help guide organisations and should be leveraged to cultivate smarter, more effective customer data strategies and technologies to provide customers with explicit, intelligent choices over the experiences that interest them. Ultimately, by delivering more relevant customer experiences, companies can finally become truly customer-centric, thereby generating greater brand loyalty and a stronger bottom lines – all while staying compliant with the ‘dreaded’ GDPR.