Data privacy compliance has taken center stage in the past few years. From the introduction of the GDPR in 2018 to increased enforcement and fines for privacy breaches, the shift towards a privacy-first online environment is unmistakable.
This shift also affects the consumer trust level in brands – with various impact levels depending on the industry. In 2024, the industries with the highest share of digital trust are banking (44%) and healthcare (41%). Retail, on the other hand, has a low level of digital trust, with only 8% of consumers worldwide that trust this industry. Given this, it is no surprise that users are reluctant to share their data with ecommerce businesses. Consumers will not hesitate to walk away from doing business with a company that does not demonstrate good privacy practices nor is transparent or ethical enough.
Let’s also not forget that users are given a large privacy toolbox nowadays to control who gets their data and when they get it: built-in cookie blockers, ad-blocking software and incognito browsers. Today, showing that you are doing the right thing with your users’ data is no longer seen as a luxury, but as a true differentiator for brands. In this article, we take a look at different steps your company should take to not only survive, but thrive in a privacy-first world.
If you haven’t started yet, you are not the only one
If you haven’t thought about data privacy compliance yet, you should start sooner rather than later. Concerns around privacy can have a real impact on the bottom line of your business, but they can even extend further than monetary repercussions. In fact, clear data compliance policy and ethical data practices fuel your marketing activations and provide a competitive advantage.
The very first step is to inventory all the data your company captures. This includes data provided directly by customers, as well as data from tags. This will help you understand your company’s vulnerabilities concerning existing regulations and the phase-out of third-party cookies.
Can you justify all the data your company is holding on to? Is this communicated clearly to the users? Are you capturing data through implicit or explicit consent? How reliant are you on third party data to reach out to your audience? Those are questions you should start asking yourself now to improve your data management.
What are some key guidelines for data privacy compliance?
Let’s start with the fact that it is not a question of being ethical or not. It is not a binary position. You need to find the right balance you are willing to apply in your relationship with your customers. How much of a personalized experience do you want to deliver and how much of the data you need is your consumer ready to share? Below we explore some guidelines your company should keep in mind in the context of data privacy compliance.
Gain your consumers’ trust
The easy answer to “How to gain someone’s trust?” is “Tell the truth.”
In the context of data privacy compliance, whenever a user is giving out their data, you need to be crystal clear as to how that data will be used. Did you know that only 29% of consumers worldwide have a good understanding of how well a company protects their personal data? If you communicate your data policy in a transparent way, you’re already way ahead of many other companies, which will benefit your customer relations.
You will certainly use customer data in many different ways, so it’s a good practice to be upfront about this:
- Do you personalize their website experience during their next visit? Say so.
- Will you send them recommendations based on their prior purchases? Say so.
- Do you retarget them with card abandonment messaging? Say so.
- Are you contacting them via Facebook ads? Say so.
Be transparent and forefront
You need to be explicit, forefront and honest in your communications with your future and existing customers. That may be a given, but you will not gain your consumers’ trust by hiding everything in your terms and conditions, at the very bottom of your website.
The consumer has to feel like they are in the driver’s seat when it comes to their data. You are probably thinking about making that cookie banner truly visible upon landing; but there are other tools that you can leverage as well. For instance, make it very easy to access their full data through an easy-to-navigate user portal. The search to exercise their right to be forgotten should also be easy.
Show them the reward
It is all about the value exchange between the consumer and your company. Think of it as a trade: consumers provide their data in exchange for better experiences with your brand. With this idea in mind, the reward that the user gets in exchange for their data needs to be worth it for that person.
One last thing: you do not have to ask for everything at once. This is part of building trust with your customers, where you prove yourself bit by bit. As you continue gaining their trust, you can engage them to give additional data in exchange for more value. Yes, patience is in order!
Conclusion: the importance of transparency in data privacy compliance
With new data regulations and laws emerging every year, it’s important to take a proactive stance when it comes to data privacy compliance. The first step in setting up or evaluating your strategy should be knowing where your company stands from a data standpoint, and this across silos within your organization. Data privacy is not only a marketing concern but should be a priority for every department and be supported by management.
Keep in mind that being a truly ethical company comes as a key differentiator for the majority of consumers: gain their trust, be transparent and trend toward enriching that value exchange. Want to get started with data privacy compliance or refine your current strategies? Click the button below and reach out to our team.
Sources
Share of consumers worldwide that trust digital services in 2024, by industry – Statista
IAPP Privacy and Consumer Trust Report – Executive Summary – IAPP
