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The Privacy Paradox

Posted on: August 16, 2019 | Posted by: Sona Sharma

The Importance of Customer Data Management for Authentic Personalization

There is a privacy paradox when it comes to the use of customer data to optimize the customer experience. Many brands are opting to use anonymized or aggregated customer behavior data in their engagement efforts to avoid the risk of violating increasingly stringent data privacy regulations. But at the same time, 75% of customers report they are more likely to buy from a retailer that engages them in meaningful and relevant ways than one that doesn’t. This requires the brand to access customer data and be aware of their transactional history, digital activity on the brand’s website and apps, as well as preferences.  In fact, millennials are simultaneously less trusting of brands to use their data in ethical ways, and more willing to exchange information with enterprises for added convenience and personalization. This paradox emphasizes the need to deliver authentic, personalized experiences while still protecting customer data.

The Rise of Customer Data Regulation

In recent years, as customers became more concerned with their data, governments have responded with an increasing number of rules and regulations. Most notably for the enterprise, in May 2018 the General Data Protection Regulation (GDPR) took effect across the European Union, which imposed strict new rules on controlling and processing personally identifiable information (PII). This has challenged enterprises to re-examine their customer data management practices to ensure that personalization doesn’t come at the expense of privacy and security.

Take, for instance, the usage of a customer’s email. While in the past, once an enterprise received a particular individual’s email they could add it to their database for ongoing, cross-campaign use, today customers must consent at every instance. Say, a customer opts-in to receive an eBlast about a particular product. Under GDPR, that does not allow an enterprise to send them their monthly eNewsletter; the customer would need to separately and specifically subscribe to the eNewsletter first.

The U.S. has also begun to take strides to implement more strict legislation. In California, a hub of many of the nation’s largest tech companies, the California Consumer Privacy Act will go into effect on Jan. 1, 2020. Reminiscent of Europe’s GDPR, it is the most ambitious data privacy law voted into effect at the state or federal level in the U.S. today and sets a precedent that will require enterprises to further protect consumer data.

Data Regulation & Personalization Platforms

Fearful of violating regulations—and accruing hefty fines—some enterprises have turned back to a de-identified approach to customer data management, treating individuals as large segments. For enterprises seeking to deliver 1:1 engagement, connecting their customers more easily to products and promotions of interest, such action feels like a step in the wrong direction. Luckily, data security doesn’t have to come at the expense of personalization.

Through legitimate interest—an exception to the strict parameters set forth by GDPR—an authentic personalization platform is able to remain in compliance with regulations while still delivering exceptional experiences to customers. For some interactions, like downloading a mobile app, enterprises are able to achieve necessary permissions for all app-based interactions at once, allowing customers to set up configurations like location tracking at the onset.

Here are some of the ways that an authentic personalization platform can help you deliver the 1:1 experiences customers’ desire, while simultaneously protecting their data and remaining in compliance with all security and privacy regulations:

  • Stay Transparent. Your platform must have mechanisms for customers to provide consent before showing them personalized content. For the sake of convenience, customers often opt-in without reading privacy notices; at the same time, they feel anxious that they ignored lengthy privacy notices and consent pop-ups. By being clear, concise, and transparent that data is never stored or sold, enterprises can remain in compliance with GDPR and alleviate customer concern.
  • Add Value. By informing customers that data usage is exclusively to provide added perks like free shipping and BOGO offers, and no PII is stored, customers feel confident that participation doesn’t come at the expense of security.
  • Look to their Surroundings. Third-party data is fair game to use in personalization efforts. By leveraging environmental data such as current weather conditions when creating promotions and offers, enterprises can improve the relevancy of content they deliver without relying on customer-specific data only.
  • Use Relevant De-identified Data. When paired with other data points, de-identified customer data can culminate in highly personalized engagement. Through the intelligent use of social proof (e.g. Check out the latest product reviews.) and urgency messages (e.g. Only 6 more in stock. Buy now!), enterprises can connect customers to relevant and timely content.
  • Keep it Timely. 1:1 interaction based on a customer’s real-time actions are also permissible under GDPR. By responding to customer’s in-the-moment context—but not storing this information—and responding with personalized offers, enterprises can maximize personalization efforts.

At ZineOne, we believe that data protection is an integral component of an authentic personalization platform. That’s why our AI-powered Intelligent Customer Engagement (ICE) platform does not store customer PII and receives customer consent in line with all government regulations, making certain that customers only see the relevant and timely content they wish to see. Schedule a no-obligation demo today to find out more about how our personalization platform protects customer privacy and security while helping your enterprise deliver a highly differentiated customer experience.

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