Blogs Five Essential Steps for Handling Customer Data Responsibly

Written by Paula Chiocchi on 2015-04-29

 

As organizations continue to gather large amounts of their customers’ personal data, some marketers may become punch-drunk with regard to the potential use of that data. They may have visions of constant emails, newsletters, special offers, social media activities, user groups, user reviews –endless possibilities, indeed!

In reality, experienced marketers have learned that bombarding customers and otherwise misusing their customer data is a great way to chase them away. In addition, storing large amounts of sensitive customer data creates a tempting target for cyber-criminals, especially smaller companies who may have less robust security measure in place. As a result, successful marketers today have learned to strike a balance in how they use personal customer data: while it represents a goldmine of opportunities, using it wisely means doing so in a way that only boosts the customer relationship.

Recent reports show that the proper and secure use of customer data can serve to increase their trust, loyalty and respect. A Harris Poll survey in late 2014 found that 67% of U.S. adults would be willing to give companies access to basic personal information in exchange for better service or products. In addition, 44% of consumers felt that in the past 12 months, they’ve received more relevant offers by sharing more personal data with companies they typically buy from.

Looking at it from another perspective, another recent report reveals that 61% of respondents said they would avoid making purchases from a brand that sends promotions which fail to recognize previous offers or previously submitted information. This demonstrates that customers will not hesitate to punish a brand that misuses, wastes or botches data previously gathered.

So what should marketers do to ensure they are using their customer data responsibly? Here are 5 essential steps to guide you:

  1. Be Transparent: Be sure to explain clearly the benefits and what’s in it for the customer. When organizations explain their intentions for data use in straightforward, non-legalese language, and spell out the specific benefits to the customer, that customer is more likely to engage with the brand and provide more information.
  2. Provide a Choice: Let customers choose how to share their information. Giving them control will only lead to more of their buy-in. Permission-based reward programs tend to have higher rates of customers opting in to share their personal data. Request customers’ preferences and make the collection of data a collaborative activity.
  3. Respect and Protect Data: Collect only the data that is needed, use it only as promised, and retain it only as long as it is needed. Give customers the ability to control their data, and allow them to opt out at any time. Avoid asking for sensitive (e.g. financial) data or creepy (e.g. questions about children) information. Destroy data safely and thoroughly. Remind customers that their data will remain confidential.
  4. Don’t Overwhelm: Marketers can stand out from the crowd and take a leadership position by taking care not to engulf customers with too much information. Make sure emails are not too frequent, while still being relevant and responsive to customers’ needs.
  5. Deliver Mutual Value: Marketers must ensure that the data they use delivers recognized value for their customers, as well as for themselves. Value is not merely referring to the benefits offered by the marketers’ products or services, or, for that matter, discounts, points or coupons. Instead, the goal should be genuine help, relevant edification or powerful insight. Timely outbound campaigns – for example, offering a discount on printer cartridges to a business customer who recently purchased a printer – can help build trust while building up the bottom line.

Using customer data responsibly entails personalizing the customer experience and anticipating customers’ needs based on provided information or previous transactions. In the end, marketers who are unsure of what constitutes “responsible use of data” should ask themselves the question, “Will this action directly benefit the customer relationship?” If the answer is unclear or, worse, “no,” that’s a good indication that the move is a wrong one and should be changed.

 

 

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