Whatever your industry, you’d be hard pressed to find anyone who doesn’t say that customer data is important for business. Yet few are realising its full potential – or properly managing the reputational risk it presents.

In our experience-driven economy, data is the most important ingredient for crafting deeply personalised experiences and delighting customers. Yet the companies most notorious for enabling this – including digital platforms Facebook and Google – are in the spotlight after an official inquiry was launched by the ACCC. The inquiry will examine how these platforms gather information about consumers and use it to target them with highly personalised advertising online.

Many marketers may worry these developments present a Catch-22 for their work. How can businesses meet these competing demands for more personalisation and more privacy?

As a starting point, it’s safe to assume a few things. Managing customer data will become an increasingly critical trust point in any business relationship and doing so effectively will only get harder the longer you leave it. Yet the rewards for businesses that get it right will far outweigh the difficulties in doing so – and it’s best to start early than risk getting caught out.

A changing data landscape

It’s clear that consumers are increasingly recognising the power of data and are far more educated on its impact and value. They’re also far more critical of companies they think manage data badly. In fact, among Australian consumers, a whopping 78 per cent believe companies aren’t taking adequate steps to protect their personal data, according to Deloitte’s annual Media Consumer Survey. Close to nine in ten (88 per cent) say they strongly value privacy over convenience, according to a survey by Privacy Australia.

To address this shift, governments around the globe are setting new standards for how businesses can use customer data, from 2018’s General Data Protection Regulation (GDPR) in the EU to Australia’s Notifiable Data Breach Scheme, which requires entities to notify individuals and the Information Commissioner about data breaches that are likely to cause “serious harm”.

The ACCC added to the debate with last year’s review of loyalty schemes, such as
frequent flyer, supermarket and hotel loyalty programs, calling on businesses that offer them to improve both their data practices and how they communicate with customers, to help consumers understand how these schemes operate.

Now it is doing so again with its announcement of two new inquiries into possible anti-competitive behaviour by digital platforms, and services allowing online advertisers to target Australian internet users.

A red line from data to value

The good news is it’s easier than many businesses imagine. Start by offering customers transparency and control of their own personal data. Not only will this give customers a better understanding of your data practices but it can also let them define their own experiences, which builds trust. There’s no better partner to businesses than an informed, empowered and data-driven customer.

To achieve this kind of partnership, businesses can no longer offer vague language and promises as to what they will give in exchange for personal information. Consumers want and need to know, in the simplest language possible, exactly how their information is being used.

Businesses should speak directly to customers as individuals, giving them confidence that they are actually a part of the process of building better experiences. In retail, for example, this could include asking for location data in exchange for push notifications alerting customers to a sale if they approach their favourite store.

It’s a simple shift, but one that eliminates doubt and treats customers as partners.

Treating customers as trusted individuals

One of the major global regulatory changes around consumer data revolves around the channels and methods we use to ask for information. Under GDPR, companies with complex, multi-page user agreements can now receive a hefty fine.

Consumer data protection laws are as unique as the regions they cover, but a common goal is to create more transparent relationships between brands and customers. Giving customers the ability to pick and choose what they sign up for and which brands they engage with is an important sign of respect.

Whether it’s the “explicit consent” requirement of GDPR or the “right to opt-out” requirements that other global initiatives include, the underlying regulatory trend is clear: give customers the explicit ability to pick and choose what they sign up for, which brands they engage with, and the specific manner in which they wish to be engaged. Make it easy to find, simple to access, and fast to change.

That includes regular – proactively shared – options to opt-out if they have been
stuck on an email list for five years.

Handing over the reins

Another emerging trend is the creation of a centralised, intuitive portal through which customers can manage their own data. Think of it like settings on your phone. Customers would get the ability to turn specific levers on and off depending on the brand they engage with.

While these rights vary depending on the specific regulation, the common thread is clear: this is the new standard. Making it a key part of your customers’ experiences will show that you’re taking their data as seriously as they do.

Resetting the relationship

The global conversation around data has evolved significantly in recent years. From hacking and data breaches to exceptional data-driven customer relationships, personal information has become the foundation through which brands either succeed or fall short. With increasing scrutiny, such as the ACCC’s latest probe, you should expect the way you handle data to become increasingly visible, whether you are ready or not.

Brands can stay ahead of customer expectations and build trust by putting customer needs first, setting the highest possible bar for transparency and giving customers control and choice when it comes to their personal data.

This article first appeared on The Australian.