Leveraging Consumer Data in the Privacy Era

This is the latest in Street Fight’s “Pursuing Privacy” series – our editorial focus in January, including topics like GDPR, CCPA, and location data collection. See the rest of the series here and our full slate of monthly themes here.  

For the past decade, companies have been learning about their customers, tracking their behaviors, and aggregating data to identify untapped marketing opportunities. Combining thousands of separate data sources, businesses have been able to learn where their customers are going, what they’re spending money on, and what kinds of experiences make them want to visit more frequently.

The practice of combining data sources to generate detailed customer profiles has been well covered in technology and marketing media, including publications like Street Fight.

But this new era of transparent consumer privacy, and in particular the implementation of the California Consumer Privacy Act, has some marketers wondering what will become of the strategies they’ve taken years to perfect and how those strategies will evolve, or disappear, under tighter privacy regulations.

What impact will the CCPA, and future privacy regulations that are likely to be enacted by other states, as well as on the federal level, have on the way marketers build customer data profiles?

One of the key parts of the CCPA that impacts how companies build their customer profiles has to do with how businesses handle the consent management of the “Do Not Sell My Personal Information” requirement. Consumers have grown accustomed to hitting “accept” for cookies, thanks in large part to the GDPR, but because the rhetoric of selling data sounds inherently bad, analysts are predicting that opt-out rates under the CCPA will be much higher. Some estimates are putting potential opt-outs at upwards of 90%.

Industry executives are working overtime to help their clients maintain their current marketing practices without running afoul of the latest privacy regulations. Over at Tealium, a firm that specializes in customer data management and protection, Co-Founder and Chief Technology Officer Mike Anderson is encouraging clients to focus on the customer experience of consent while clearly articulating why they need consumers’ data.

“You can’t build customer profiles if the data isn’t there,” Anderson says. “There’s a level of education needed at the point of consent to show the consumer what value they will get in return when they opt-in.”

Anderson points out that companies will need the right technology to implement consent management in real-time when it comes to collecting, or stopping collection altogether. That opens up a new door for technology vendors. In a recent interview, Invoca CEO Gregg Johnson predicted similar opportunities would open up for software companies that are knowledgeable and committed to the newest standards.

Outside of technology, there’s a human component at play here, too. Given all the public discussion around consumer privacy, Anderson says consumers right now need to trust the companies they patronize more than ever before.

“Before these privacy regulations, consumers had little recourse when that trust was violated. Now, consumers can opt-out of data collection that companies need to build their customer profiles,” he says. “Companies will have to earn—and keep earning—their customer’s trust by clearly communicating the value of collecting data and then being good stewards of that data.”

Part of being a good steward entails using customer data for more than just reporting, and going the next step to deliver the personalized experiences that are worthwhile for consumers to share their data—provided that consumers have signed onto that personalization.

“Right now, it’s going to be hard for even the most well-intentioned brands to be good stewards of consumer data, because most companies’ tech stack is fractured and siloed—a scenario that used to be just wasteful and frustrating before privacy regulations,” Anderson says. “With CCPA, and GDPR before it, companies are going to have to focus on unifying the fractured ways that data is collected, stored, and disseminated. That means building a customer data supply chain that can govern all of these data sources at the level of the individual.”

Looking ahead into the coming years, Anderson cautions brands to be transparent in how they are collecting data. He also says brands need to explain the ‘why,’ and says companies should strive to tell consumers the story of how they are using their data to create relevant brand experiences.

“When brands have the level of control over their data needed to deliver such transparency, they’ll be able to deliver context-rich experiences such as product recommendations based on purchase history and emails tailored to the consumer’s tastes,” Anderson says. “By making the value of the consumer’s data known upfront, consumers are more than likely to share more data with a brand to create a more unique experience.”

Stephanie Miles is a senior editor at Street Fight.