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GDPR: context is all

Posted on: Tuesday 3rd of May 2016

Until very recently how organisations treated customers’ personal data was irrelevant in customer relationship and brand terms. Every large scale organisation bar none was applying the same basic philosophy and approaches. Customers knew little or nothing about what was being done with their data (whether good or bad), and competition focused on the free use of data rather than the relationship with the individual data owners themselves, or whether the data was being effectively used.

But then came Snowden. And data breaches. And media stories about apps that steal your data. And controversy about Facebook and Google’s privacy policies. And consumers’ growing awareness of the value of their data. And their growing sense that the value exchange is not currently equitable.

And. And. And.

 

A fork in the road

As a result, over the last few years the data climate has changed dramatically. But most organisations’ strategies have not changed with it.

Every brand and every organisation now faces a fork in the road:

  • to carry on with business as usual (which boils down to collecting data about customers, doing stuff like analytics behind their backs, and using it to do stuff to them) or
  • to build a trusted data sharing relationship with customers.

Why bother with building trusted data relationships with customers? Because of the changed climate. Organisations are feeling the impact of the fork in the road at three levels:

  1. Negative effects on business as usual. Brands that aren’t trusted face restricted access and use of data as customers adopt data dirtying tactics (providing misinformation), opt out, refuse permission, install ad-blockers. They face a potential loss of customers.
  2. Positive effects on business as usual. Brands that are trusted are experiencing increased customer willingness to share information, higher levels of opt-in, more permissions, and the potential to gain new customers. Clean data, purposefully collected is more effective data.
  3. Transformational opportunities, using data with customers to generate new revenue streams and boost brand reputations via new customer information services. These are services that deploy customer data to address previously unmet customer needs e.g. making better decisions, managing my life better. This third element of trusted data relationships has the potential to transform what value organisations add and how. It places them on a new strategic trajectory that’s fit for purpose in a digital age.

 

Tarred with the same brush

There’s a challenge here, however.

Currently, because of the way the personal data environment has evolved, customers tend to tar all brands with the same brush. Precisely because there has been a monoculture in customer data every company is assumed to be the same. Even if companies are trustworthy on data, they still risk being tarred with the same brush, because customers don’t know they are different.

That’s creating an urgent need to stand out from the crowd. To demonstrate that ‘we are different’. To build trust. To avoid the negatives and build the positives, placing the company in a position where it can seize the transformational opportunity.

 

GDPR: costly and invisible?

Enter GDPR, Europe’s new General Data Protection Regulations.

There’s no doubt. GDPR is a major compliance challenge. But it’s more than that. GDPR changes organisations’ data relationship with their customers. It introduces and extends a swathe of consumer rights and corporate responsibilities. These include informing customers about data use, providing mechanisms for consent to data processing and emphasising rights to: withdraw consent; object to processing; correct errors; be forgotten; object to profiling and to data portability. In doing so, it’s bringing this data relationship to consumers’ attention in ways not seen before.

In short, it’s a catalyst of change.

The question is not whether you comply, it’s how you comply. The risk for companies is that they undertake all the cost and work of formal compliance for zero marketplace benefit: because customers won’t see any real change of heart and still tar the company with the same brush.

This, when the urgent need is to stand out from the crowd and seize the positive opportunities generated by trusted brands. With GDPR comes an opportunity to turn compliance cost into competitive advantage. But for this, you need a strategy …