Why consumer concerns about privacy can be good for business


Consumer data privacy has been a burning issue for some time, but with new regulations and changing consumer mindsets, tackling it is even more crucial. The question is not whether to continue collecting consumer data, but how best to communicate the benefits of data sharing and assure consumers that you are using their data safely. Follow these tips to build trust with consumers when it comes to sharing data.

Over the past few years, concerns about consumer privacy – particularly around data sharing – have steadily increased. This has resulted in regulations, such as the EU General Data Protection Regulation and the California Consumer Privacy Act, and caused most companies to recognize the need to better protect consumer data. Apple now uses its privacy efforts as a selling point, and even Google has made progress towards greater data privacy, striving to make third-party cookies obsolete by 2024.

All of this could lead organizations to infer that consumers no longer want to share their information. However, this is far from the case. Around 40% of people said they are willing to share their personal information as long as they know who is using the information and what it is for. This percentage increases up to 80% when consumers derive clear benefits from data sharing.

The question for companies, therefore, is not whether to collect consumer information, but rather how best to communicate the benefits of data sharing and reassure users about the security of their data. It’s not only about being transparent with consumers, but also about adapting new processes to ensure the security of the information they share and only requesting information that brings real value to consumers. With the right approach, it’s possible for businesses to deliver the personalized experiences consumers want, while building user trust in data privacy.

Why data sharing done right is a win-win

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

One of the most common ways for organizations to collect data is to third-party cookies. For brands, these cookies have long been considered the key to delivering personalized ads and better digital experiences. For users, however, they are often seen as privacy invasions, monitoring their behavior and offering little benefit in return.

In reality, the reality is somewhere in between. Third-party cookies are useful for collecting data from external channels and provide certain benefits to consumers. However, they also lack the transparency that consumers want and are rarely as accurate as first-party data. As attitudes about data privacy continue to evolve, now is a great time to re-evaluate the methods you use to collect consumer insights.

While first-party data doesn’t give you insights from outside sources, it makes up for that with real-time, contextual information that’s easier to organize and use to build better personalized experiences for consumers.

It can help you go beyond just filling out forms and saving preferences to deliver digital experiences that truly meet consumer needs and wants. And, because there’s no middleman between you and the consumer, it’s easier to communicate exactly what’s being shared, how it’s protected, and how consumers benefit.

Switching from third-party cookies to first-party data alone will not solve all data privacy issues. But it’s the first step on the road to a more powerful, consumer-trusted data sharing strategy.

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

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

    When it comes to building trust, the easiest and most effective strategy is to be honest and upfront. But it’s more about reassuring consumers that their data is safe and that you recognize its value. Build trust by explaining how seriously you take data protection and give users control over their data. Remember: this doesn’t mean burying communication in a lengthy privacy policy. Make sure your data policy is clearly visible and easy to understand for non-data scientists.

  2. Encourage sharing.
    The only way data sharing can work in the long run is if both parties benefit from it mutually. You can encourage sharing by focusing on personalization. Brands can add real value by delivering highly relevant and meaningful personalized digital experiences.

    You can do this through dynamic content or relevant product recommendations. Deliver 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 are really listening to them and can anticipate their needs.

  3. Keep consumer data private and secure.
    Data is a privilege, not a right. Don’t share data with third parties without express permission – and even then you should do so sparingly. Create 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 collection and storage of your consumer data is handled securely and with the appropriate technology. This will also ensure that this is done with respect for privacy. By taking data privacy seriously, you will build loyalty and improve your reputation with consumers.

The increased data privacy concerns should act as a wake-up call for businesses. That doesn’t mean you should stop using consumer insights altogether, but rather use it more effectively. By being transparent and delivering real value, you can take your data sharing efforts to a whole new level – and do it with happy consumers by your side.

Written by Diane Keng.
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