Modern companies have unfettered access to a staggering amount of data to extract meaningful insights and predict future outcomes. They use data-driven marketing to reach their target audience and improve their bottomlines. Marketers rely on different types of customer data to make key decisions in terms of how and when to promote a product, devise action plans to drive conversions and understand the buying patterns of customers to optimise inventory planning and distribution strategies. The marketing analytics market was valued at USD 2.13 billion in 2020 and is expected to reach USD 4.68 billion by 2026, at a CAGR of 14 percent over the forecast period, as per a Mordor Intelligence report.
Marketing strategies are powered by the huge corpus of customer data and the analytics capabilities used to extract insights out of the said data. The issue here is, that customer data contains sensitive information, and using such information can compromise the privacy of customers.
Sign up for your weekly dose of what's up in emerging technology.
Customers across the world are now becoming more aware and more vocal about data privacy. In India, the Data Protection Bill was tabled in December last year, and the government is taking steps to protect the data privacy of the citizens.
Thanks to the digital revolution, navigating the modern world involves sharing your data, especially transaction data. The companies analyse the transaction data to segment customers based on their value to the business.
With the increasing awareness around data privacy, the companies are required to put a mechanism in place to bring more transparency and accountability to the data collection, sharing and usage processes.
Building customer trust is essential
Companies must realise that privacy concerns are on the consumer’s mind. A great way to build trust is to advocate data privacy and promote it as companies’ core value. To build a long-term relationship with customers, it becomes essential to address their concerns. The companies should take initiatives to assure customers their data wouldn’t be misused.
Most of the time websites collect data about the IP address, location, and bank details when a customer visits the site or makes purchases. Companies should be transparent and disclose their license agreements and inform customers what data they keep, what they do with the data, etc.
Complaint and feedback mechanism
The company should have a feedback mechanism in place to address the customer concerns around the protection or use of their data. Responses should be given in a timely manner by domain experts to gain customer trust.
Contingency plans to deal with a data breach
In the last few years, we have seen many data breaches happen where the personal data of thousands of customers have been exposed. The companies should have a contingency plan to deal with data hacks. They should also develop crisis management plans to contain the damage in the event of data breaches.
The ultimate power should be with the consumer in terms of what data they want to share and what they don’t. The consumer should be at the centre of the decision making process in terms of data sharing and usage. Communicating the privacy policies clearly, and making consumers aware of the data sharing practices, build trust, lead to better customer experiences, and in turn, translates to good business outcomes.
This article is written by a member of the AIM Leaders Council. AIM Leaders Council is an invitation-only forum of senior executives in the Data Science and Analytics industry. To check if you are eligible for a membership, please fill out the form here.