Facebook’s Cambridge Analytica data privacy scandal erupted in March 2018.
Europe’s General Data Protection Regulation (GDPR) went into effect May 25.
California passed the U.S.’s toughest data privacy law, the California Consumer Privacy Act, in June.
All told, 2018 has been a banner year in terms of data privacy. But what does it mean for you, the digital marketer? How can you continue to deliver relevant offers and promotions in real-time to consumers — without running afoul of new privacy regulations? And how can a customer data platform (CDP) help you succeed in this new world?
Here’s what you need to know.
You Can’t Assume You Have the Right to Consumers’ Data
In this era of heightened data privacy awareness, you can no longer assume you have the right to collect and use consumer data as you wish. Those days are over.
If you need guidance on where we’re heading, look to the California Consumer Privacy Act, which is similar to the GDPR. With the new law, which will go into effect Jan. 1, 2020, consumers have the right to know what type of data your organization has collected on them; how you’re using their data; and with which third-party organizations, if any, you intend to share their data. California also gives consumers the power to object to the sale of their data.
Related Article: 5 Reasons to Make a Customer Data Platform the Hub of Your Martech Stack
You Need to Build Trust
Moving forward in 2019 and beyond, marketers need to focus on ‘permission marketing,’ which helps build trust among consumers.
“The combination of consumer resistance and regulatory constraints marks a fundamental turning point in how companies process data, create experiences, and build long-term relationships,” writes Tim Walters, Ph.D., in a new white paper entitled “Promise and Permission: The Role of Trust in the New Data Economy.”
“In the emerging new data economy, marketers and other customer experience teams will be on the front lines of a competitive battle for the rich personal data required to fuel and sustain the relevant experiences consumers demand,” Walters writes. “As consumers assert more control over their data, they will tend to share it with companies that are both reliable data stewards and attractive partners in a mutual exchange of value. In short, the perceived trustworthiness of a company will be the decisive factor that determines whether consumers provide access to personal data. Marketers need to understand and master the dynamics of trust in personal data exchanges.”
You Need to Know Everything About Your Customer Data
Customer data is often scattered across various martech systems and databases, such as Customer Relationship Management (CRM) and email marketing systems. Given that organizations today use on average of 91 marketing cloud services (according to Mary Meeker’s 2017 Internet Trends report), it’s easy to lose track of where all your customer data resides.
Until this year, we’ve lived in a kind of “Wild West” where customer data is concerned. But heads up: The new regulations — and those certain to follow — mean that you’d better know everything you can about your customer data. Where did it come from? Where is it stored? What does it include? How is it being used or shared? Did the consumer opt into sharing the data?
Today’s data privacy regulations are having a similar effect to what happened in the wake of the Sarbanes-Oxley Act. SOX, as it’s called, was enacted in 2002 following corporate and accounting scandals. Because of SOX, CEOs must know everything going on in their business. Similarly, with GDPR and the California Consumer Privacy Act, marketers now need to know everything about their customer data or else risk noncompliance — and customer outrage.
Related Article: Solving the Challenges of Fractured Customer Identities
Learning Opportunities
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The CX Commute vs. the CX Joy Ride
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An Optimized Customer Contact Strategy Combines Transparency and Intelligence: The State of Outbound Communications
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Adopt a Modern Digital-First Marketing Strategy
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First-Party Data Will Be More Important Than Ever
Third-party data is, in essence, surveillance on customers that you’ve purchased — their web browsing behavior, the ads they’ve clicked, and such. The data collected correlates customers’ interests and is shared in a cookie pool for ad targeting purposes. Though such third-party data starts off as anonymous user information, it can be connected to first-party data, which isn’t anonymous and which is typically information customers have agreed to share.
In this new era of consumer privacy regulations, connecting third-party data with first-party data can be toxic. You’ve now got identifiable information on individuals they didn’t agree to share. Also, the accuracy of third-party data can be questionable.
In contrast, first-party data is collected when someone interacts with you directly. Because of that direct engagement, you have the ability to explicitly ask for a consumer’s permission to capture their data. You can explain how you’d like to use their data, and what you can offer them in exchange for their consent. For example, when a consumer comes to your website to download a recipe, you have the opportunity to ask for their permission to use their data in exchange for the recipe.
Ultimately, first-party data is infinitely safer than third-party data because you’ve captured the data yourself vs. simply acquiring it from another source, and you’ve had the opportunity to ask for the appropriate permissions.
How a CDP Can Help
A CDP integrates all your customer data across all your martech tools, platforms and databases, such as CRMs, website traffic, customer call center interactions, and in-store purchases. Without a CDP, those data sets are usually siloed. If you have 91 martech tools, you may have 91 customer data silos.
CDPs integrate all the bits and fragments you have about your customer into a single, cohesive view of the customer — versus a fractured customer identity. With a CDP, you know where all your customer data is because it’s gathered in one place. The best CDPs also provide a digital chain of custody — a kind of “paper trail” that gives you a history of how your customer data came to be and where it came from.
This last point is key because, in the age of GDPR, it’s imperative from a compliance standpoint to know if your data comes from Europe, North America, or elsewhere. How your customer data is collected and integrated could potentially destroy the chain of custody. So it’s important to have a CDP that helps you ensure that the ‘paper trail’ doesn’t get lost in the database.
A CDP can help you stay in compliance — as well as please your customers, which is ultimately what GDPR and the California privacy law ultimately set out to achieve.
With a CDP, you can use your customer data across all your martech tools in a consistent way. You can continuously honor your customers’ declared preferences about how they want to be contacted. You can make each customer experience great in a way that gives the customer control— and that earns the customer’s trust.
Ultimately, GDPR and other privacy regulations present not so much a roadblock but an opportunity. When you have all your customer data in one place, and that central repository also leverages machine learning, you can deliver real value to the customer — and in turn, deliver value to your brand.
Learn More
- Discover how the Lytics Customer Data Platform can help you with GDPR and other data privacy regulations:
- “How Lytics Supports GDPR”
- “The Burdens and Benefits of the GDPR”
- “Webinar: GDPR Roadmap for Marketers”