Walking the tightrope between privacy and personalization

In the present-day era of always-on technology, data has revolutionized the digital experience. When consumers power on their devices, they instantly enjoy concierge-like services that anticipate their needs and provide them with what they want, when they want it. E-commerce sites like Amazon deliver targeted recommendations based on products consumers own, while social networking sites like Facebook, Twitter and LinkedIn suggest adding and following recent contacts – all without typing a name or uploading a photo. Despite the added convenience, personalization and improved experience, consumers often worry and ask themselves, “How do these sites and services know so much about me?”

Companies’ growing desire to anticipate future moments of opportunity – a topic highlighted in Accenture’s 2019 Technology Vision report – has become the foundation for building fast, hyper-personalized connections with consumers using tools like artificial intelligence and machine learning. In pursuit of the optimal omnichannel experience, companies must take caution before “cool” becomes “creepy,”. Many consumers feel brands don’t know them well enough, but when those brands seem to know too much - and act on that knowledge - they can quickly lose their trust. Accenture’s 2019 Consumer Pulse Survey showed that a quarter of Canadian consumers said a brand had become “too personal” and 63% of these consumers would stop doing business with a brand or reconsider their relationship to the brand because of this.

Organizations need to find ways to protect consumer data, minimize risk and be transparent throughout the process.

Three best practices for balancing data mining and customer’s desire

Define and set standards for handling sensitive information  

A lot has changed about the digital experience today, particularly consumers’ expectations and it’s important to ensure that user data is always secure and only used when, and for as long as needed.

Developing an approach that protects consumer privacy starts with defining which aspects of the data and the marketing strategy are most sensitive. In the Marketing Disrupted podcast, this topic was discussed with Éloïse Gratton, a partner at Borden Ladner Gervais LLP and one of the top privacy lawyers in Canada. She suggests this data is “anything that would fill the consumer with a sense of uneasiness if they were targeted using that content.” Companies do not want to have consumers asking how they got their data, or worse, coming to no longer expect privacy at all.

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These implications mean companies should consider focus groups, privacy impact assessments and business cases ahead of their data mining – not only to identify privacy risks and decide on measures that could be implemented to reduce those risks, but also to demonstrate the business has done its homework. From here, personalization can be done with the conscious consent of users.

Prioritize data minimalism

Fjord’s Trends 2019 report built on the concept of data minimalism – collecting only what is needed to drive a service or program. A company embracing this would ask itself what specifically it needs to know and how exactly it will use that data to drive the target outcome. With the answers to these questions in mind, a company could start to take comfort in steering clear of legal implications, including the General Data Protection Regulation (GDPR).

As digital transformation has progressed, so too has consumer sentiment. Through surveys, software giant Adobe found that consumers have realized how quickly their personal information can proliferate, leading them to increase their defenses and be more cautious about data sharing. Sara Clodman, VP of public affairs at the Canadian Marketing Association, says companies should help consumers understand that using their data in appropriate ways, such as to target the things they want, “is actually a very useful thing.” Similarly, as Fjord outlines in their Trends report, companies must design for transparency so that consumers can trust they are pursuing only the data they need and using that data responsibly.

Once collected and analyzed, data insights can be used to better understand consumer habits and enhance existing service offerings. Adobe did this well by launching mobile-friendly apps of their most popular design programs, including Lightroom, without requiring a paid Adobe ID.

Think of data as currency

If data use was compared to a transaction, consumers would willingly provide their data to get something in return. Today, new tools and services like the Wibson mobile app act as personal data brokers to help people get paid for their personal data.

Research continuously shows that when a customer shares their data with a company for a known and equitable trade, outcome or result, they feel more at ease about sharing their data. The same consumers who are cognizant of their data also do not want to be treated like strangers, especially by the brands they reward with their loyalty. Therefore, data should be seen as a currency – a very valuable one. In a recent content survey, Adobe found that most consumers highly value prioritization. More than two-thirds of respondents said they would have less business with a company that does not personalize their deliverables, noting they do not have the time or desire to consume irrelevant content.

Adobe is not alone in its finding. In her annual internet trends report, renowned venture capitalist Mary Meeker presented data that over 90 per cent of customers prefer brands with personalized offers, with more than 80 per cent willing to passively share data and more than 70 per cent willing to actively share data for personalized experiences. Loyalty programs such as Pharmaprix PC Optimum, which offer incentives for purchases and personalized offers, are a great method to leverage existing engagement and provide a coveted value-add interaction.

Own the privacy and data personalization power struggle

Though initial walks along the tightrope may be shaky, companies can achieve a steady balance between privacy and data personalization. Companies in Canada and abroad can equip themselves to provide their desired consumer experience with a few cautions:

  1. Treat user data responsibly and map out where additional security is needed.
  2. Only collect the user data necessary to drive the desired outcome or experience.
  3. Use data insights to tap into consumer’s desires and provide a positive reward that strengthens the consumer-company relationship.

Companies who follow these steps are best positioned to deliver customized digital experiences that drive positive ROI and are just the customer experience with the right amount of memorable.

About the author
Brent Chaters is Accenture’s Canada Digital Customer & Marketing Transformation lead. He has over 20 years of digital marketing experience both as an applied marketer and consulting for marketers through multiple industries working for some of the largest Fortune 500 brands around the globe. He is a co-host of the Marketing Disrupted podcast series, as well as the author of Mastering Search Analytics and co-author of Multichannel Marketing Ecosystems: Creating Connected Customer Experiences. He has taught for ISDI & Harvard’s Global Executive Master Digital Business on both Social CRM and Customer Experience. He is also a judge for the 2019 CMA Awards in the Brand Building discipline.

The opinions expressed in this post are those of the author and do not necessarily reflect those of the Chamber of Commerce of Metropolitan Montreal. As a result, the Chamber cannot be held responsible for published content.

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