Personalization and Data Privacy: Finding the Balance
Arun Pillai, November 4, 2022
While it’s true that customers today want personalized brand experiences, they may not like the fact that it happens only when companies access relevant data about them. In fact, the drive to personalize is championed by leveraging customer data. However, accessing customer data for personalizing product recommendations does not mean compromising its privacy.
If anything, personalization and data privacy are not conflicting ideologies; instead, they are symbiotic opportunities. Thanks to data-driven personalization, customers receive only brand education or solutions they are looking for. Through personalization, brands forge unending trust, loyalty, and revenue by valuing their customers’ time. The more brands pitch what buyers desire, the more they feel heard and valued.
However, the concern for data privacy with increasing personalization and hyper-personalization is legit. And it is a brand’s responsibility to strike a balance between the two. But how? Keep reading to find out.
- Always Educate Your Customers on How You Will Use Data
This does not mean placing a multi-page data usage policy in front of potential customers. If you are genuinely interested in informing future buyers why they should willingly provide their data through pop-up forms, newsletter subscriptions, or over phone calls, highlight key usage areas.
Sure, you can place long terms and conditions documents for them to accept, but this should come along with the key highlights from within that doc. For example, certain insurance policy websites do this sort of thing. While they have a cumbersome T&C doc, they also share a highlighted version that explains policy inclusions, exclusions, and any other key points. You can fashion a similar solution explaining the nature of data usage.
Doing this will significantly boost transparency. It will assure leads their data is safe. You can also inform customers how you use the finest of servers to store and protect data. Also, if you have a data deletion policy, be sure to discuss it with them. For example, if your company deletes prospect data every two years, your leads must know this before they sign up with you.
Know that all these tips build trust instantly. Not only do they assure leads you won’t misuse data, but they also encourage them to share information with you.
So, asking potential customers for personal preferences and contact info is acceptable as long as you go out of your way to inform them of your usage intentions.
- Gather Only What You Need
It’s not uncommon to get carried away while collecting data. You may ask for more than is required to personalize brand communication. This is a slippery slope, which you must avoid at all costs. By collecting unnecessary data, not only will you end up making potential customers suspect your intent, but you will also add to in-house data redundancy. Collect information exclusively required for a specific product line or service. Obtaining invalid and sensitive information can lead to a breach of trust.
Also, remember that the more questions you ask, the fewer responses you’ll garner. For example, the top-performing pop-ups only have one or two questions. No wonder they enjoy a high conversion rate of 42.35%.
Simply put, collect only the data you need for personalizing brand communication. For this, get your marketing team to identify your data collection parameters.
- Always Comply with Data Laws
Before collecting and especially executing any personalized marketing campaign, companies must understand and comply with all the legislative frameworks. Some include GDPR laws, CCPA compliance, CAN-SPAM ACT, and more.
Doing this will not only leave your customers feeling safe but will also safeguard you from any penal matters that may arise in the long term. Anyway, finding yourself on the right side of the law is never a bad thing.
Start by hiring any legal assistance you may require to understand data privacy and compliance. After which, highlight the data laws you comply with in front of your customers. You can include key compliance-related information when educating potential buyers on your data usage policy.
- Allow Customers to Control the Data They Share
Let potential customers take charge of controlling their information even after they share it with you. They mustn’t feel like you own their data. To fulfill this endeavor, you can undertake certain activities. For example, make unsubscribing possible and relatively easy if you communicate through email.
If there is nothing to unsubscribe for, provide an interface for the remote deletion of customer accounts or a dedicated contact where they can send in deletion requests.
By redistributing the control of data, you gain customer trust without hampering personalization efforts. Anyway, there’s not much point in investing resources in customers and prospects who wish to end communication with you.
- Opt for Reliable Third-Party Data Providers
In addition to gathering customer data for personalization in-house, you may also reach out to third-party data providers. Approaching these entities is an excellent idea as they are entirely dedicated to collecting, appending, and enriching databases across sectors.
Safe to say, third-party data providers, offer a cost-effective way to gain the correct customer information. This is especially useful for small businesses and startups with no significant data budget.
However, selecting the right third-party data provider is crucial to balance your personalization activities. You need one that respects data compliance and adheres to privacy norms, among other things.
Here are the questions you should ask third-party data providers before choosing one:
- What are your data sources? The answer to this helps you gauge the authenticity and accuracy of the dataset you’ll receive.
- What is the deliverability rate you can guarantee? The answer to this helps figure out if there is any data decay. Go with a provider that offers a 95% delivery rate guarantee.
- How accurate is your data? Go with a provider who assures 100% accuracy, meaning the dataset must be free from incomplete entries, typos, repetitions, and eroded contacts.
- How compliant are you with data privacy and security laws? The answer to this reveals if they at least adhere to GDPR and CAN-SPAM Act. If they do, it automatically means they have ethically sourced data, which is permission-based.
In the End
Implementing personalized campaigns is the ultimate roadmap to success for any organization. But only if you balance it right by respecting customer data privacy. Consider the five best practices listed above as a must-do before you collect and leverage customer data for personalization.