How to get customer data privacy right

APAC marketers are facing a dual challenge — customers enjoy a personalised experience but worry about sharing their data. New Adobe research shows that personalisation and privacy can go together well if marketers take a new approach to using customer data.

The experience privacy paradox

‘You might also like…’ In a perfect world, brands anticipate what customers want and offer exactly this product or service when people want it. Adobe recently surveyed over 12,000 consumers worldwide and found that 83% of APAC consumers^[i] said that great, personalised content delivered at the right time builds their trust in a brand.

At the same time, customers are more worried than ever about their data privacy. Contrary to popular belief, privacy concerns is not an ‘old people’ thing, with 85% of APAC customers saying they are concerned about how companies use their data. While it is true that about 82% of global baby boomers worry, 77% of millennials and 73% of the online-savvy Gen Z worry, too.

Many customers speculate about why brands are even collecting customer data. For example, 85% of APAC customers believe firms might sell that information and only 38% believe that sharing their data is worth the risk. When it comes to data sharing, marketers have yet to make a convincing case with customers.

Brands are increasingly concerned about keeping customer data safe. Serge Raffard, Group Strategy and Marketing Officer at global insurance firm Allianz, told Adobe, “It takes time to build trust and you can lose it overnight. We need to do whatever it takes to get the maximum security for our customer data.”

Better personalisation and privacy may sound like competing targets but it doesn’t have to be that way. As the research reveals, leading marketers are already providing highly personalised customer experiences, while using customer data responsibly. They make data privacy work for both customers and the company, and act with empathy whenever things go wrong.

Make data privacy work for customers and for the brand

1. Turn data privacy into a powerful brand benefit

For decades, firms have built successful brands by addressing pain points their competitors did not dare to tackle. IKEA, for example, had long allowed customers to return unwanted furniture (until it ditched the policy). Muji has pioneered non-branded quality products. Uniqlo creates a unique store experience, greeting customers across the globe with “welcome to Uniqlo”. These brands stand out from the competition and customers love them.

When it comes to data privacy, the top spot is still up for grabs. To get there, customers don’t ask for too much. In Asia Pacific, 82% of customers want to decide how firms used their data. Seventy seven percent desire more transparency and 72% asked that firms use their data only for what really matters: making the customer experience better. Fair enough.

For almost every product category, there is now an opportunity to make data privacy a decisive brand benefit. This comes down to giving people a real, transparent data choice, while building experiences that make customers say: “They really understand me.”

2. Build a data privacy culture — starting at the top

It’s hard, if not impossible, for one leader to solve a firm’s customer privacy challenges and employees at all levels must be involved. Take a simple piece of insight like a customer’s age — this information may sit in one database and then be copied into another. The marketing team uses age to segment for an email campaign. The product team does a subsequent search to understand which products this age group prefers, and so on. Suddenly, this one piece of data was used by hundreds of people. Even if their actions were well intended, the firm could have breached numerous data and privacy laws and annoyed customers.

Policies matter, but they aren’t enough to do the trick. Adherence to data processes and systems inside firms is typically mixed, according to consulting firm Deloitte[^ii]. To get data privacy right, firms need a much wider approach, led by the company’s senior leaders; however, this message hasn’t made it into every C-Suite. The Adobe survey found that only 5% of APAC executives believe customers worry about how firms used their data. Only 42% see strong data privacy and governance processes as top priorities. It’s now important for senior leaders in APAC to treat data privacy with more urgency.

Leading brands are already taking a more holistic approach to customer privacy. Examples of best practices include assigning customer privacy to one board member; educating employees at all levels; writing policies in simple and understandable language, including “why” they matter; using data cleanrooms, where customer information is stripped of unnecessary elements; auditing technology regularly to ensure all software adheres to the strictest data privacy needs; and so on. Experts from IT consultancy Cognizant suggest brands “start simple and modest and don’t overestimate what the organisation is able to digest”.

3. Realise that less data is more

In the past, marketers have relied heavily on third-party data and simple cookies to target customers. To inform campaigns, many brands are still trying to obtain as much customer data as possible. Both approaches are problematic.

Thanks to regulation and advances in technology, cookies, as we know them, will soon cease to exist. Randomly tracking and targeting across the web will become more difficult, if not impossible. Simply piling up and using masses of customer data increasingly violates privacy laws. In the US, for example, when deciding on mortgages, fair lending regulations prohibit banks from using information such as race, colour, national origin, religion or sex.

While these changes may sound like limitations, they are necessary corrections that will force more focus in marketing. Leading APAC marketers are now honing in on two data strategies:

1. Building out first-party data — Instead of relying on third-party information, leading brands have aggressively built out their own customer databases. The rationale is simple: the quality of their own data will almost always be better, competitors won’t have access to the same data and the brand can collect the insights it actually needs. In many cases, this requires investment in state-of-the art technology. What may sound like a costly investment often offers incredible returns when firms acquire customers at a faster and cheaper rate.
2. Asking for less — To create a personalised experience, marketers often need less, but better data. One chief marketing officer shared with us, “I tell my team every piece of data is an ask from customers.” The moment marketers scrutinise their real data needs, the list of information required often becomes shorter. Richard Lees, Chief Strategy Officer at customer experience consultancy Merkle, suggests “taking a step back and asking, why am I collecting this data in the first place? By approaching data through a customer experience mindset, we encourage a different type of collection, interpretation and activation.” Asking customers for less data will bring marketers ahead of looming regulation and help teams focus.

Act with empathy when things go wrong

Even with the best human effort, a brand might experience data breaches, hacks or mistakes. When this happens, it is often too late to turn back the clock. These are moments of truth! Customers know that things can go wrong. When they do, trust in a brand will suffer. The question then becomes, how quickly do brands rebuild trust? The answer lies in the way they respond. Empathy matters. This proven three-step approach can help:

1. Real facts — When things go wrong, we expect the other side to take full responsibility. Customers can tell a lie from afar, and if they do, the brand will lose even more trust. Trusted brands don’t cover things up. Instead, they honestly admit what went wrong instead of hiding the truth behind marketing speak.
2. Real apology — Explaining what happened to customers is important, but it is not enough. People also expect an empathic response and apology. “We did this thing; we know it was wrong; we’re sorry for the problems that we caused.” Customers told Adobe how important such an apology is, 76% of APAC consumers found it important and only 2% said that it was not important at all. If things go wrong, companies must apologise.
3. Real fix — No matter what the apology memo reads, people will lose trust entirely if the issue happens again. Customers expect companies to take real action. 84% of APAC customers told Adobe that to regain trust, they want the brand to work hard to keep their data actually safe. For brands, this includes immediate fixes but also long-term fixes (eg, fundamental changes to behaviours, strategies, structures and processes) to stop the issue from ever appearing in the first place. Beyond issuing an apology, it is important that brands tell customers the actual steps they take to fix a problem.

There is now a major opportunity for brands to build better, personalised customer experiences while keeping people’s data safe. Success is about a new approach to privacy and empathic responses when things go wrong. Talking of empathy, customers had another surprising message for marketers — when Adobe asked people what brands could do to show more empathy, most customers picked ‘knowing when not to contact me’. After all, personalised experiences and data privacy might just be the winning combination.

^{[i] Adobe APAC Trust Report. Regions covered: Australia, India, Malaysia, New Zealand, Singapore, Thailand
[ii] Building Consumer Trust. Protecting personal data in the consumer product industry, Deloitte University Press}

Image credit: iStock.com/arthobbit