How Can Data Privacy Laws Improve Personalized Marketing?

Brian Cleary | June 7, 2018

Data Privacy can have an Impact on Personalized MarketingTighter data privacy laws are a golden opportunity for forward-thinking brands. One of the essential changes necessary to comply with modern data privacy regulations is heightened data quality across the organization. As data quality increases, so does the understanding brands have about their customers’ preferences, needs, and wants. This deeper understanding presents an opportunity for brands to communicate with more relevance and context with their customers. As a result, brands drive greater personalized communications that increase the customer experience and, over time, customer loyalty.

This enviable byproduct of tighter data privacy rules is exactly what consumers want and marketers are looking to achieve. In a recent survey of senior marketing executives, 58 percent believed the need to provide deep relevance and contextual experiences that are meaningful and valued by an individual customer is driving advancement and innovation. How can communicating the way the customer prefers to be communicated with be a bad thing? Better data quality enables brands to be more relevant to their customers’ lives and reduces friction in the path to purchase cycle.

While there’s certainly an associated cost burden for any data privacy regulation, brands focused on the negatives miss that these regulations provide an opportunity to ultimately improve the customer experience. The high-quality customer data that results when complying with privacy regulations is most valuable to the enterprise when it’s incorporated into the customer experience value chain. To provide contextually relevant customer interactions, brands need to know all that is knowable about their customer; as it is one of the pillars of outstanding customer experience. This requires working from a single canonical record that collects every data point about an individual customer across the organization into one continuously updating record – commonly known as a unified customer profile, or “golden record.”

Identity Resolution in the New Data Privacy Environment

The era of passive opt-in, where consumers who visited a brand’s website automatically agreed to data collection, is fading away. In writing new data privacy rules, regulators worldwide have emphasized that customers need to be involved in the decision-making process about their personally identifiable information. Who can use each customer’s data? What can it be used for? These are questions brands increasingly need to let customers answer.

Consumers are willing to share their data if they get something in return. Accenture recently found that 83 percent of consumers will share their data in exchange for a personalized experience, but only as long as businesses are transparent about how the data is used and that customers retain control of the information. Brands need to show that they respect the customer’s wishes and actively participate in a two-way value exchange. Identity resolution is a key facet of that. If brands are unable to recognize consumers across all touchpoints, then they are unable to provide the relevant communications consumers deserve and expect.

The right technology is key to resolving customer identities, especially given the volume and variety of data being created every day. Data lakes and data warehouses lack the capabilities necessary to link the disconnected pieces together. Instead, brands need a purpose-built solution designed expressly to unify data across silos, build and maintain the golden record, and provide centralized control from a single portal. The only solution capable of achieving this level of identity resolution across the organization is a customer data platform.

Adopt a Customer Data Platform to Build the Golden Record

Customer data platforms (CDPs) are purpose-built to integrate multiple varieties, velocities, and volumes of data. The better ones provide persistent key management that powers identity resolution across any current and future engagement touchpoints. The futureproofed nature of a customer data platform is key in the new data privacy environment. Regulations (and data technologies) change constantly, so the flexibility of a CDP proves invaluable to the compliance process.

CDPs provide a central point of control for maintaining golden customer records. With a well-deployed customer data platform, brands can manage customer communication preferences across the organization as well as consent from within a single portal. The centralization of data control possible with a customer data platform can be transformative. As data management and identity resolution practices improve, brands with CDPs can more readily personalize the customer experience and manage preferences because they understand the customer more closely.

The age of passive consent is waning. Consumers now pay closer attention to which brands have their data and how it is used. Brands who use data to crystallize their understanding of customer preferences, and to personalize interactions, will be rewarded with higher loyalty and increased revenue. They will share in some $800 billion in revenue recently predicted to shift over the next five years to the top 15 percent of organizations who provide the best personalization. Leveraging customer data in the new data privacy environment is good for all consumers and for every brand who gets it right.

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Brian Cleary
Brian Cleary

As RedPoint Global VP of Solutions Marketing, Brian Cleary is responsible for ensuring that the voice of the customer and RedPoint’s key markets are reflected in our technology roadmap, as well as RedPoint's go-to-market approach. Brian brings more than 20 years of success in directing product management, marketing, and sales strategies for emerging software companies and top-tier enterprise software vendors.