Take a moment to consider all the data-driven products and services that have become part of our everyday lives. There’s a reason parents get bombarded with Netflix recommendations for Incredibles 2 and Despicable Me 3 – the application’s algorithm has picked up on their family-friendly viewing habits. Countless websites, apps and other digital services are constantly tweaked based on user feedback and other forms of data.
As data collection and analysis tools become increasingly sophisticated and accessible, they’ll be used more widely than ever. Meanwhile, all those applications we love will continue to transform the way companies interact with and learn about their customers. Customers get better service and companies get the information they need -- what’s not to like?
Unfortunately, things aren’t so simple. While consumers have accepted the fact that many of their favorite products and services are also instruments for collecting a whole lot of information about them, they’re becoming more suspicious about exactly how that data is acquired and used. After a series of high-profile data breaches and scandals, governments are taking notice as well, which is why the EU's General Data Protection Regulation (GDPR) is likely a harbinger of more regulations and laws to come.
But this is no reason to panic. Instead of regarding these developments as obstacles, data-driven companies should embrace them as reasons to make their data practices as secure and transparent as possible.
As the co-founder and CEO of an app for parents to capture and share their children’s lives through photo journaling, my team and I want everyone to be empowered to decide how they want their children’s lives shared. We support three million users and tens of millions of their children’s moments, so we appreciate the importance of security. Here are my top tips on respecting your customer data.
Prove to your customers that you can be trusted with their data.
Considering the huge amount of highly sensitive information stored online, it’s no surprise that consumers are worried about what companies are doing with it. According to a2017 PricewaterhouseCooper survey, just 25% of consumers “believe most companies handle their sensitive personal data responsibly.” We clearly have a major trust problem here.
However, it’s not a mystery why the issues of trust and personal data are on consumers’ minds after a spate of massive data breaches that exposed opaque and reckless data practices at major companies. For example, it took Equifax six weeksto inform customers that it had suffered one of the largest data breaches in U.S. history. Incidents like this are one of the reasons why GDPR requires companies to inform customers about data breaches within 72 hours of discovering them.
But companies shouldn’t have to be cajoled into being open with their customers about their data practices (and breaches when they occur) by strict laws and regulations. They shouldwantto develop their data platforms as transparently and responsibly as possible. If you’re honest with your customers about your mistakes and policies, they’ll be more likely to continue to provide the information you need.
Make sure customer data is being put to good use.
Transparency isn’t just necessary when things go wrong – it should be integral to how you engage with customers all the time. You should always explain exactly why you need your customers’ information and how it will be used. But responsible data usage isn’t enough for customers who are giving companies access to their information – they also expect to get something in return.
According to a Deloitte survey, 79% of consumers were “willing to share their data if there was a clear benefit for them.” There are countless ways data can be used to add value for consumers -- from AI-powered chatbots and other engagement tools that “learn” how to communicate more effectively to personalized recommendations and services.
