Think of the last time you received a recommendation for a product or service from a company that anticipated your needs with surprising accuracy. Did you end up making the purchase?
The ability to understand and respond to a customer’s stated and unstated needs can make all the difference in winning and growing market share. A survey conducted by PwC found 67% of consumers share their data, feeling that the benefits exceed any hesitation they may feel; furthermore, 76% said that sharing personal information was a “necessary evil.”
While personalizing their experience can delight customers, it can also make some consumers deeply uncomfortable. CITE Research Dassault Systèmes determined that 96% of consumers expressed concerns about data privacy and personalization, while 88% stated they would discontinue a helpful personalization service if they didn’t understand how their data was managed.
It’s a tricky balancing act, but there are best practices for personalization and data privacy. Small business marketing professionals from Lasting Trend, Force by Mojio and RoverPass share their approaches.
1. Understand and comply with laws governing data privacy.
Achieving regulatory compliance can earn your customer’s trust; it will also provide your company with guiding principles to build a new personalization program or revise an existing effort with data privacy and protection in mind.
For example, general data protection regulation (GDPR) embraces the principles of “privacy by design” and “privacy by default.” Privacy by design requires organizations to consider privacy as it develops new products, processes and services.
Build confidentiality into the design of all processes, and treat data confidentiality as a key component of your organization and all business initiatives.
—Tim Absalikov, co-founder and CEO of Lasting Trend
Privacy by default means that any service or system involving the processing of personal data allows an individual to have control over how a company uses its data. Absent a user’s input, default options provide the user with a high degree of privacy.
“Maintaining confidentiality closely relies on data management,” says Tim Absalikov, co-founder and CEO of Lasting Trend, a digital marketing agency based in New York City. “Build confidentiality into the design of all processes, and treat data confidentiality as a key component of your organization and all business initiatives.”
2. Limit the type of data collected.
Daivat Dholakia, director of operations for Force by Mojio, which offers fleet tracking software for small business owners, boils down the challenges of how much data to collect to one rule. “The key to personalizing marketing materials without violating customer privacy is really quite simple: Only use the information you’ve specifically asked for and the customer has agreed to give you. Ideally, this is information you required via double opt-in authentication.”
Generally, the more data your company gathers, the greater the potential for loss, theft or misuse. When asking customers to share information, it’s best practice to collect only what your company needs to fuel the personalization program. Moreover, collecting excess data can shift too much of an administrative burden to customers; it can also cause some customers to become uncomfortable with the requests and move their business to a competitor that asks for less data.
The key to personalizing marketing materials without violating customer privacy is really quite simple: Only use the information you’ve specifically asked for and the customer has agreed to give you.
—Daivat Dholakia, director of operations for Force by Mojio
3. Communicate your data privacy and protection policy.
Thirty-nine percent of consumers say that transparency around data-use and how data is shared are important policies, according to PwC.
While sharing an entire policy may already be a requirement to achieve regulatory compliance, many customers ignore overly detailed privacy policies. For this reason, it’s best to look for additional ways to communicate your company’s approach to data privacy clearly and concisely so the average customer can understand it.
4. Educate employees on customer data privacy.
According to Verizon’s 2021 Data Breach Investigations Report, 85% of all breaches involved a human element, which can include those working inside the company. Employees play a critical security role, which is why it’s pivotal to provide training on data protection and privacy, including the regulatory requirements and your company’s policy and procedures governing the use of personal data.
5. Grant access to personal data sparingly.
While gathering data is critical to personalization, Ravi Parikh, CEO of RoverPass, a provider of a central reservation system for campgrounds and trailer parks, believes small businesses make a critical mistake when handling customer data.
“Data privacy is the name of the game in 2021. However, so is personalized marketing. For many small businesses, the key is developing a strong security net. Heavily restricting access to user information should be a top priority,” Parikh says.
Data privacy is the name of the game in 2021. However, so is personalized marketing.
—Ravi Parikh, CEO of RoverPass
Parikh adds that businesses tend to give too much data access to new employees as soon as they’re hired. “This can come with massive repercussions if they turn out to have ill intent. Limiting access to a small handful of senior employees is the best way to go.”
Personalization without compromising privacy
Businesses can gather and use data to create engaging and memorable customer experiences to attract and retain customers. This allows individuals to form attachments with companies that deliver the products and services that most closely meet their needs.
While your business may face a need to comply with one or more data privacy regulations, absent those compliance requirements, consumers expect the companies they entrust with their personal data to protect it.