Business Transformation

Why Consumer Privacy Concerns Can Be Good for Business

Diane Keng

Consumer data privacy has been a hot-button issue for a while, but with new regulations and shifting consumer mindsets, it’s even more critical to address. The question isn’t whether to keep collecting consumer data, but how best to communicate the advantages of data sharing and assure consumers that you’re using their data safely. Follow these tips to build trust with consumers when it comes to data sharing.

Over the past few years, concerns over consumer privacy — especially regarding data sharing — have been steadily increasing. This has resulted in regulations, such as the EU’s General Data Protection Regulation and the California Consumer Privacy Act, and has caused most businesses to recognize the need to better protect consumer data. Apple now uses its privacy efforts as a selling point, and even Google has made moves toward greater data privacy, working to make third-party cookies obsolete by 2024.

All of this might lead organizations to infer that consumers no longer want to share their information. However, this is far from the case. Around 40% of people have said they’re willing to share their personal details as long as they know who is using the information and what it’s being used for. That percentage goes up as high as 80% when consumers receive clear benefits from data sharing.

The question for businesses, then, isn’t whether to collect consumer information, but rather how to best communicate the benefits of data sharing and reassure users that their data is being kept safe. Not only is it about being transparent with consumers, but also adapting new processes to ensure you’re keeping the information they do share safe and only asking for information that provides real value to consumers. With the right approach, it’s possible for companies to deliver the personalized experiences consumers desire, while at the same time building trust with users when it comes to data privacy.

Why Data Sharing Done Right Is a Win-Win

Data is crucial for delivering the highly personalized experiences consumers not only want, but also expect when engaging with brands. But that doesn’t mean all methods of data collection are created equal.

One of the most common ways organizations collect data is through third-party cookies. For brands, these cookies have long been viewed as the keys to delivering personalized ads and better digital experiences. For users, however, they’re often seen as invasions of privacy, monitoring their behaviors and offering little upsides in return.

In actuality, the reality is somewhere in between. Third-party cookies are useful for collecting data from outside channels and do provide some benefits to consumers. However, they also lack the transparency consumers want and are rarely as accurate as first-party data. As attitudes around data privacy continue to shift, this is the perfect time to reevaluate the methods you use to collect consumer information.

Although first-party data won’t provide you with information from outside sources, it makes up for this with real-time, contextual information that’s easier to organize and use to develop better personalized experiences for consumers.

This can help you go beyond simple form-filling and preference-saving to deliver digital experiences that truly cater to consumers’ needs and wants. And, because there’s no intermediary between you and the consumer, it’s easier to communicate exactly what’s being shared, how it’s safeguarded, and how consumers benefit.

Switching from third-party cookies to first-party data alone won’t solve every data privacy problem. But it’s the first step on the path toward a more powerful, consumer-approved data sharing strategy.

Here are three steps for building better data relationships with consumers:

  1. Be transparent and trustworthy.
    Transparency is about open and clear communication. In being transparent, you want to educate your consumers about why you are collecting their data and then tell them how you plan to use it — in an easy-to-understand way. For example, using cookie banners is an easy way to explain terms of data usage and how it will benefit the consumer. Trust is a byproduct of being transparent.

    When it comes to building trust, the simplest and most effective strategy is to be honest and forthright. But it is more about reassuring consumers that their data is safe and that you recognize its value. Instill trust by being vocal about how seriously you take data protection and give users control over their data. Remember: This doesn’t mean burying communication in a long-winded privacy policy. Make sure your data policy is clearly visible and easy to understand for the non-data scientist crowd.

  2. Incentivize sharing.
    The only way data sharing can work in the long term is if both parties mutually benefit. You can incentivize sharing by focusing on personalization. Brands can provide real value by providing highly relevant and meaningful personalized digital experiences.

    You can do this via dynamic content or relevant product recommendations. Offer tangible value to consumers who sign up for your services or agree to share their personal information with you. You can also use predictive personalization, which will demonstrate to your consumers that you genuinely listen to them and can anticipate their needs.

  3. Keep consumer data private and safe.
    Data is a privilege, not a right. Don’t share data with third parties without express permission — and even then, you should do that sparingly. Build a privacy-first mindset and approach with your consumers.

    You can do this through partnerships. By partnering with a privacy company, you can ensure that the collecting and storing of your consumers’ data is handled safely and with the correct technology. This will also ensure that it is done in a privacy-compliant way. By taking data privacy seriously, you’ll build loyalty and improve your reputation among consumers.

The increase in concerns over data privacy should act as a wake-up call for businesses. It doesn’t mean you have to stop using consumer information altogether, but rather use it in better ways. By being transparent and providing real value, you can take your data sharing efforts to a whole new level — and do it with consumers happily at your side.

Written by Diane Keng.
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Diane Keng
Diane Keng is the CEO and co-founder of Breinify, an AI and predictive personalization engine helping brands curate dynamic, meaningful experiences for consumers at scale. Diane is on Forbes’ 30 Under 30 for enterprise technology.

Diane Keng is an opinion columnist for the CEOWORLD magazine. You can follow her on LinkedIn.