Consumer data privacy has been a hot topic for a while, but with new regulations and changing consumer mindsets, it’s even more critical to address. The question is not whether to continue collecting consumer data, but how best to communicate the advantages of data sharing and reassure consumers that you are using their data safely. Follow these tips to build trust with consumers when it comes to sharing data.
Over the past few years, concerns over consumer privacy – especially regarding data sharing – have grown steadily. This has resulted in regulations, such as the EU’s General Data Protection Regulation and the California Consumer Privacy Act, and has led most businesses to recognize the need to better protect consumer data. Apple now uses its privacy efforts as a selling point, and even Google has made moves toward greater data privacy, working to make third-party cookies obsolete by 2024.
All of this can lead organizations to conclude that consumers no longer want to share their information. However, this is far from the case. circle 40% of people have said they are willing to share their personal data as long as they know who is using the information and what it is being used for. This percentage increases up to 80% when consumers receive clear benefits from data sharing.
The question for businesses, then, is not whether they should collect consumer information, but rather how best to communicate the benefits of data sharing and assure users that their data is kept secure. It’s not just about being transparent with consumers, it’s also about adapting new processes to ensure you keep the information they share secure and only ask for information that provides real value to consumers. With the right approach, it’s possible for companies to deliver the personalized experiences consumers want, while simultaneously building trust with users when it comes to data privacy.
Why data sharing done right is profitable
Data is essential to delivering the highly personalized experiences that consumers not only want, but expect when engaging with brands. But that doesn’t mean all data collection methods are created equal.
One of the most common ways organizations collect data is through third party cookies. For brands, these cookies have long been seen as the keys to delivering personalized advertising and better digital experiences. For users, however, they are often seen as invasions of privacy, monitoring their behavior and offering few advantages in return.
Actually, the reality is somewhere in between. Third-party cookies are useful for collecting data from external channels and provide several benefits to consumers. However, they also lack the transparency that consumers want and are rarely as accurate as first-party data. As attitudes around data privacy continue to change, this is the perfect time to reevaluate the methods you use to collect consumer information.
Although first-party data won’t give you information from external sources, it makes up for it with real-time contextual information that’s easier to organize and use to develop better, personalized experiences for consumers.
This can help you go beyond simple form filling and saving preferences to deliver digital experiences that truly meet consumers’ needs and wants. And, because there’s no middleman between you and the consumer, it’s easier to communicate exactly what’s shared, how it’s protected, and how consumers benefit.
Switching from third-party cookies to first-party data will not solve every data privacy problem. But it’s the first step on the road to a more robust, consumer-approved data sharing strategy.
Here are three steps to building better customer data relationships:
- Be transparent and reliable.
Transparency is about open and clear communication. By being transparent, you want to educate consumers about why you’re collecting their data and then tell them how you plan to use it—in a way that’s easy to understand. For example, using cookie banners is a simple way to explain the terms of data use and how the consumer will benefit. Trust is a byproduct of being transparent.
- Encourage sharing.
The only way that data sharing can work in the long term is if both parties mutually benefit. You can stimulate sharing by focusing on personalization. Brands can deliver real value by delivering highly relevant and meaningful personalized digital experiences.
You can do this through dynamic content or relevant product recommendations. Provide tangible value to consumers who sign up for your services or agree to share their personal information with you. You can also use predictive personalization, which will show your customers that you really listen to them and can anticipate their needs.
- Keep customer data private and secure.
Data is a privilege, not a right. Do not share data with third parties without express permission – and even then, you should do so sparingly. Build a privacy-first mindset and approach with your customers.
You can do this through partnerships. By partnering with a privacy company, you can ensure that the collection and storage of your customers’ data is handled securely and with the right technology. This will also ensure that it is done in a privacy compliant manner. By taking data privacy seriously, you will build loyalty and improve your reputation among consumers.
of growing data privacy concerns should act as a wake-up call for businesses. This doesn’t mean you should stop using customer information altogether, but use it in better ways. By being transparent and providing real value, you can take your data-sharing efforts to a whole new level—and do so with consumers happily on your side.
Written by Diane Keng.
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