The rise of data conscious consumers & why privacy management needs to be a core part of CX strategy
It’s been 5 years since GDPR was passed in the European parliament and since then a ripple effect has occurred across the globe with many countries (or states of) following suit with the introduction of new legislation to combat the rising exploitation of customer data.
Those changes have reverberated through the marketing and data industry as the tech giants – Google and Apple announce a suite of major platform changes that provide consumers with more control over how their data is utilised and limits data collection by those businesses (agencies / platforms) who consumers are least likely to know are harvesting their data in the first place. From the phase out of 3rd party cookies, to the impending iOS changes – data privacy legislation is having a significant impact around how brands market and engage their customers. But whilst the big tech giants are leading the way – the majority of brands still have their heads buried in the sand about what all of the privacy legislation change means for them and their CX strategy.
Consumer expectations they are a changing
When consumers pass over personal information, they’re simultaneously putting their trust in that company to protect their data and use it responsibly. That doesn’t mean they aren’t hesitant though. A recent McKinsey report found that 54% of consumers reported that they feel worried about what companies are doing with their data. Despite their concern however few consumers take adequate protective precautions to protect their personal information.
A recent report by the OAIC which studied Australian Community Attitudes to Privacy found that seven in 10 respondents nominated privacy as a major concern for them, while 87 percent wanted more control and choice over the collection and use of their personal information.
Most Australians also believe they should have the right to ask a business to delete their personal information (84 per cent) – something which GDPR already allows European consumers to do.
In a recent PwC study of global consumers, it was found that 85% of consumers wish they could trust more companies with their data. Given that data is constantly being collected from consumers, whether it’s their shopping habits, online browsing behaviour, and other data points it is incumbent on organisations and marketers to demonstrate they can be trusted with their personal data. . When companies fail to uphold their side of the equation, this negatively impacts the customer experience, and can cause material brand reputational damage which is difficult to recover from. This forms one of the strongest arguments as to why marketers need to have a stronger focus on data privacy and protection. .
So if consumer expectations have evolved this dramatically, why is it that privacy isn’t playing a more prominent role in CX strategy?
Whilst CX is one of the key strategies organisations are deploying to drive growth and gain competitive advantage – many have failed to connect the dots between the importance of privacy and data ethics as a key pillar of their strategy in the face of changing customer expectations. Privacy itself as a discipline has historically been seen as the domain of compliance or legal, despite the fact that marketers are usually one of the key users of the information. This in many respects defers accountability to those who have little to do with influencing the customer experience. Many CX practitioners whilst highly skilled also lack knowledge and understanding of data privacy best practice and data ethics – which means their processes fail to consider it as part of the design process.
A few progressive brands see data ethics and protection as a key competitive advantage and have been quick to respond to changing consumer expectations. IKEA is one such brand that has embedded it as a core part of how they do business which is something we expect to start to see more of as more organisations connect the dots between the importance of privacy and data protection and their CX strategy as opposed to it being an afterthought.
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