Personalization and Privacy: Striking the Right Balance

With Cambridge Analytica, British Airways, and several other high-profile data breaches making headlines, retailers are (unsurprisingly) starting to reconsider their own customer data policies. But rather than making the mistake of seeing these events as an obstacle, they should see them for what they are: an opportunity.

In the last few years, customer experience has become a battleground for brands, with 81 percent of marketers expecting to compete on experience alone by 2020. Tensions around the data fueling personalized experiences might be making brands skittish, but that won't change the fact that customers expect better experiences.

It’s easy to see data issues and their resulting regulations as the end of the customer experience arms race, but rising customer expectations won’t let that happen. In fact, it’s time for retailers to double down on their customer experience efforts by making data part of the experience. Retailers that take this step to balance personalization and privacy won’t just survive these tensions, they’ll thrive in them.

But before I get into how, it's time to talk regulations.

Technology is always two steps ahead of regulation, and customer data acquisition and application is no exception. With more advanced data technology comes more advanced data regulations.

For retailers, their data strategies are designed to produce better customer experiences. Similarly, for regulators, their rules are designed to produce safer, more secure customer experiences. On both sides, data abuse and breaches are counter to these goals. Nobody wins in a data breach.

And while it’s tempting to treat new privacy regulations as a crisis, your brand has already (hopefully) complied to numerous customer data regulations that came before — you can do this.

Now, back to strategy.

How can your brand strike the right balance between personalization and privacy? And how can it do so in a way that improves customer experience? To start, let’s address this year’s biggest move in data regulation: GDPR.

Behind the ominous acronym and thousand-page document, there are two key parts of the law: communication and consent. Customers need to understand what’s being done with their data and they need to sign off on it.

Here, retailers have a huge opportunity to show customers what data does to improve their experience and empower customers to take an active role in creating that experience. Instead of hiding all the hard work that goes into creating data-driven personalized experiences, retailers need to start showing off — from explaining the adaptability of responsive journeys to demonstrating personalized product recommendations to providing examples of dynamic content.

When faced with GDPR’s “right to be forgotten,” retailers need to give customers a “reason to be known.”

If you can’t show how the data you’re collecting is making customer experience better, then you shouldn’t be collecting that data in the first place. Balancing personalization and privacy starts with keeping customers at the heart of your data strategy. It’s their data; they’re just lending it to you.

While retailers have a lot to consider when navigating data breaches and regulations, there’s one rule to remember: only chase data that makes your customers’ lives better.

After all, the competition is fierce, and if you can't improve customer experiences, someone else will.

Ross Andrew Paquette is the chairman and CEO of Maropost, a provider of easy-to-use, enterprise-grade software solutions to help you scale your sales and marketing while staying lean.