In current and projected marketing trends, customer data is the lifeblood of all your strategies. It should be.
Personalization is steadily getting more established. 2020 is predicted as the year when marketing will truly utilize personalization. Many marketers already understand that the ability to sustain a competitive advantage rests on using the data they have to continue to market and sell to their customers.
But compliance laws like the GDPR and the CCPA (California Consumer Privacy Act) can intimidate and confuse businesses that want to step into customer data.
Here’s our Customer Data 101 to clarify what you need to know and what’s good to do with data. Good for your customers, good for your business.
A snippet history on customer data collection
If you’re new to this, it helps to come in with the understanding that sales and marketing has been collecting customer data for ages.
It’s the surveys our mothers filled out to get free magazines or free soaps. It’s the customer profile you gladly spent 30 minutes completing, in printed cards or online when businesses started moving to the internet.
It’s what a billion people worldwide painstakingly filled out and kept updated for their profiles on MySpace, Friendster, and then on Facebook, Instagram, Twitter, and YouTube, among others. That’s not even counting those fun little quizzes you answer to pass the time on a break or during your commute!
We’ve been giving away data with no fuss for decades. We didn’t think about it much. Then the Cambridge Analytica scandal blew open to really catch our attention (though data breaches have become disturbingly ubiquitous over the last several years).
This is why people became more than a little paranoid about their personal information, and why businesses and marketers became leery of a similar fallout. Data usage, collection, and personalization became tainted as creepy, invasive profiling.
Consider this a challenge to marketers to be as transparent as possible about how they handle customer data and what they will and won’t do with that data.
All the compliance regulations boil down to this: companies should have a very clear reasoning and strategy about their data collection and usage.
If you practice transparency and clarity in your data collection and personalization tactics, you’re doing well — and you’ll keep doing well.
Be open about your data collection and use
Companies should be really clear about how they collect data, how they use it, and how customers can opt out if they don’t want to give away their data.
Far from data collection and privacy breaches being done on the sly, the control is returning back to consumers. Websites need tacit permission for data use and should disclose why consumers see certain messaging or offers.
When it comes to using peoples’ personal information, the last thing they should ever be greeted with is a surprise.
Plan your notifications and recommendations.
The more data you collect and use, the more visible your transparency should be.
Netflix and Amazon make it look effortless:
“Because you watched Grace and Frankie”
“Deals recommended for you”
Simple notes in ten words or less show your customers how you use their data and why they’re seeing certain messages.
Display and implement security and privacy policies
Every business should collect customer data in the service of their customers. So every business should have security and privacy policies. These should clearly state how and why you collect customer data.
Make these policies easily accessible on your website, and prominent in the pages that need them, like product pages where your recommendations appear, or your About Us and Contact pages where you might also talk about your philosophies regarding service to your customers, including the avenues of communication they can take if they have concerns about privacy.
What should be in your policies?
- What types of data you collect and your methods for collecting them
- An assurance you won’t share their data — or full disclosure about any third parties you will share with
- Options to cancel their permissions for your use of their data, or to receive messages from you
Be smart about it
Surveys, contests, transactions, email responses/actions, every point of contact is a source of data you can and should use.
A report from the Business Application Research Center (BARC) found that companies that used consumer data to drive decisions saw their profits increase by eight percent.
You need the right tools to collect and use that data. Asking customers and buying from data brokers are accepted but clunky methods of collecting data. Tracking customer behavior gives you better insight.
According to research cited by McKinsey, organizations that leverage customer behavior data to generate behavioral insights outperform peers by 85 percent in sales growth and more than 25 percent in gross margin.
AI and martech tools make it easy to track these behaviors and give you insight to drive your marketing and sales campaigns. The same AI and martech tools also make sure you don’t miss these opportunities where you can collect and use data.
Be nice about it: your customers should get something back
Your customers should feel the benefit of giving you their data.
Giving you their data translates to loyalty. After all, the above-board ways of collecting customer data stems from at least a little bit of loyalty — a customer making a first transaction, and then coming back for another, which updates and reiterates their information in your database.
Consumers know their data is currency that should earn them something valuable. They expect omnichannel service, geo-targeted offers, personalized rewards and perks easily accessible in their preferred channels — they’d ignore your attempts to lure them to SMS and registration codes they have to send if they prefer apps.
Brands in the UK, Canada and the US — think Sainsbury’s, Loblaw, Sephora and other major retailers — successfully utilize their customer data with hyper-focused offers in diverse channels according to each customer relationship.
- Would YOU want to open your emails/SMS?
- Does your store motivate you to buy again? Does it make it easy for you to repurchase?
- What rewards or campaigns do you have in place for loyal customers?
Keep it good and safe
Good means you truly collect using any of the above ways. Don’t just get it from anywhere. The CAN-SPAM Act of 2003 is a federal law that outlaws collecting email addresses from online sites without the site owner or users permission. In 2015, Vermont passed its Vermont Data Broker Law that regulates the information broker industry.
Safe means you don’t leave that data for anyone else to use; it means automatically wiping it when you’re no longer using it. It means keeping the data secure within your own company.
The European Union’s GDPR became law in 2017. It includes rules for data use, storage and sharing, with the requirement of appointing a data protection officer who alone handles the incoming data and deletes it when customers request it.
The CCPA (California Consumer Privacy Act) was passed in 2018, to illuminate the use of data for Californians. The CCPA gives Californians the right to know what data is collected on them, and the right to refuse the sale of that data.
It comes back full circle to consumers’ need for data protection and privacy. The Cambridge Analytica scandal made people aware that their data is being collected and used. While there are plenty of people who are now paranoid about their data, the majority are fine with it and simply expect companies to show that they know what to do with it.
Use it for customer interests, maintain accountability, ensure your compliance with the governing and standardized regulations (GDPR, CCPA, PCI-DSS, HIPAA, CAN-SPM — and more to come) and consistently deliver relevant content to prove the value your customers get by sharing their data with you.