Addressing the privacy issues
For those who have invested in the correct initiatives to collect, understand and use this insight to build deeper, more personalised relationships with the customer, the benefits are clear. The increased volume of data, however, has brought with it questions around privacy and data protection and a growing number of cases of data breaches.
In an attempt to address these issues, the EU is expected to move a step closer to determining data protection regulations (DPR) at the end of this year or early 2015, with initiatives expected to come into effect in 2016 or 2017.
Whilst businesses will welcome the shift being made to ensure regulations are catching up with the data evolution and ensure data privacy is being met responsibly, the proposals currently being suggested could bring a multitude of obstacles.
For businesses where the recent explosion of data, and the way it is being used, has had a significant and positive impact on how they are approaching engagement, the effect of the introduction of the DPR will be vast, significantly disrupting growth and progress of the many organisations.
An inescapable impact: felt across businesses large and small
If brought into effect, the DPR will be felt across organisations large and small, from blue chips to SMEs. Whist SMEs are likely to be more nimble and able to adapt with greater ease, the financial burdens the regulations will place on them will be more challenging to overcome.
Data has become the life blood of some many businesses in recent years, key to enhancing customer relationships and engagement, the impact of these proposals will be inescapable.
It seems ludicrous that whilst were being constantly reminded that successful customer relationships are achieved through data-driven targeted, personalised communications, the entire approach to achieving this effectively could be placed in jeopardy.
Businesses will no longer be able to target market-specific profiles making it a bit hit and miss and they won’t be able to collect individuals data without explicit consent, so tailoring brand experiences will become extremely difficult. All in all, ROI is likely to be significantly lower.
This will see vast upheaval in what has become common practise for organisations looking to deliver better and more personalised customer experiences, required if they want to establish long term relationships and see the all important results.
Additionally, the growth and evolution of industries is likely to suffer, as organisations will lack the insights that enable improvement and innovation to occur. Whilst we want to ensure the correct measures are in place to address customer concerns over data privacy, in a fast paced and ever changing world, such extreme restrictions will really place businesses at a significant disadvantage.
Keep financial costs front of mind
The DPR are likely to not only have a financial impact on revenue, as businesses fail to achieve such high level relationships with customers and prospects, but there are also the associated financial costs of the regulations themselves to consider.
This could include amending contracts, creating new data systems, retraining staff or completing compliance documents. All businesses that rely on data to deliver a better experience may be forced to find new ways of working, which will see them overcome the disruption that could be brought by the regulations.
Having pulled in data from across all its services to deliver a more personalised and consistent experience to users, the brand has been found to be in breach of a series of Data Laws, the latest being France.
Whilst it may seem like additional admin, it’s crucial that organisations keep on top of what they are required to do, so they can avoid similar costly breaches.
Transparency, self-regulation and high quality customer service remain vital
As data protection and privacy has become increasingly complex over recent years, uncertainty around how the DPR will impact businesses in the short and long term is to be expected, so keeping the DPR updates on the radar are crucial. All new initiatives of this scale take time to integrate, particularly when it is such a sensitive issue.
Organisations must remain up to date on developments to ensure they are capable of adjusting as more details are revealed.
Data privacy is certainly front of mind for customers, and rightly so; no one is disputing the importance of acting responsibly when it comes to the issue. As ever, organisations that want to deliver long-term success should be illustrating commitment to self regulation, placing customer security at the forefront and being clear in their customer communications throughout.
The regulations will force organisations to tighten up on their own self-regulation, to avoid incurring unplanned financial costs or legal action, but this doesnt mean to say organisations can’t take action before then to ensure they are continually focused on delivering the best customer service; not just when forced to.
Ultimately, transparency and openness is vital for building a mutually beneficial relationship that has longevity required to weather the DPR and achieve a more consistent partnership overall.
With a recent stat revealing that 56% of customers are worried about the internet eroding their personal privacy, it’s the organisations that can illustrate that they have clear processes in place to manage information securely that will be in a better position to gain the trust of the customer and maintain long-term business relationships.
Shaun Bailey is the CEO of Jacob Bailey