Big Data is a hot topic of conversation at the moment, and with good reason; whilst businesses and consumers benefit from the collection of customer data in many ways, it can also be a businesses’ greatest liability. Indeed, as many as forty-six per cent of companies suffered cyber security breaches in 2016 and so far this year we’ve seen an array of high profile attacks on large businesses including Tesco Bank, payday loan company Wonga and mobile operator Three.
In today’s customer-driven environment, businesses succeed because they know how to reach the right audience, in the right way, at the right time. Data collection and analysis is central to this and marketing strategies depend on the accessibility and collection of data. Yet, the recent cyber security issues emphasise the consequences of failing to keep consumer data safe. They can cause serious long-term reputational damage to organisations.
The Chartered Institute of Marketing (CIM) recently published a report emphasising the need to address disconnect between businesses and consumers on the subject of sensitive data. This issue holds a sense of urgency too; businesses will need to tackle this by next May when the General Data Protection Regulation (GDPR) legislation comes into effect.
Worryingly, the Whose Data It is Anyway report revealed that 92 per cent of consumers do not fully understand how marketers and organisations use their personal information, and half of all consumers (57 per cent) do not trust an organisation to use their data responsibly. These high percentages should be a major concern to business leaders – particularly to SMEs who may not have the budgets to implement intelligent new systems to manage the efficient handling of data.
Whilst GDPR will require a change in process for organisations, it is a welcome change for consumers because it encourages marketing teams to be clear with consumers about how their personal data is handled and provides businesses with an imperative to improve their procedures.
This is particularly important amid a backdrop of indecision caused by Brexit as well as global economic turbulence. If consumers are in the dark about what is happening to the data concerning them, businesses – large or small – must start explaining what they want the data for and what they’re doing with their personal information. If not, they risk losing customer trust and even breaking the law.
Our research shows that customer engagement, transparency and trust must become higher priorities for organisations when it comes to capturing, storing and sharing personal data. This won’t happen overnight, but marketing teams must be given the space to prepare properly. CIM’s Data Right campaign urges organisations to take action on the issue of responsible management of customer data.
Here are our four recommendations on how you can increase customer trust by getting Data Right:
Be clear: Pages and pages of terms and conditions can be very confusing and often obscure the genuine reasons why you are collecting a customer’s personal data. Tell them how and when you will use their data, in terms they can understand, and stick to your promise.
Show respect: More than half (55 per cent) of people believe the organisations that send them marketing material haven’t obtained their consent. A respect and accountability need to be at heart of the relationship with your customers – part of this involves not selling on their information to third parties if they haven’t said you can.
Be in the know: Businesses need to continually familiarise themselves with best data practice and the law, because the implications of not following the rules could severely impact your bottom line. The new general data protection legislation coming into effect in May 2018 will offer severe penalties for businesses that don’t comply – with fines of up to 20 million euros or four per cent of your annual worldwide turnover, whatever is greater.
Show the benefits: Demonstrate to customers how collecting their data can benefit them, by providing them with more targeted marketing approaches that are relevant to their interests. Make it clear that in exchange for more data, they get more relevant, targeted communications.
The GDPR legislation should not be solely viewed as an exercise in compliance; it is an opportunity for marketing teams to lead organisations and improve business standards that re-build and refresh customer trust.
Chris Daly is chief executive of the Chartered Institute of Marketing (CIM)