Even if you’re not the CMO, as an executive leader you have likely heard about the new regulations that limit the data you can collect on your prospects and customers. From Europe’s GDPR to California’s CCPA, data privacy regulations are growing in scope and numbers. Apple has recently strengthened privacy on their devices and Google is phasing out third-party cookies on Chrome.
The changes to data privacy regulations fundamentally shift the digital marketing approach nearly every company has adopted over the past couple of decades. You won’t be able to use a workaround or technical fix according to a new McKinsey article. They recommend a new approach they coined, data relationship management or DRM.
Back in 1994, Lou Montulli created cookies (small data files stored in your browser’s cache) to enable eCommerce. However, they were quickly adopted by marketers to better understand online user behaviors so they could target people with relevant messaging. Today, just one-third of consumers believe that companies use their data responsibly.
Consumer protection is the driving force for more data privacy, and many companies are already working on compliance strategies. The key is understanding how to deliver value and building trusted relationships with prospects and customers. The DRM approach outlined by McKinsey has four elements: data invitation, a data security center, data dialogue, and a data value proposition.
The days of an “accept” button for acceptance of data sharing are coming to an end. Companies will need to be more transparent and take more responsibility for the information they are asking for from consumers. To create a more fully permission-based process, McKinsey recommends:
- Leveraging an omnichannel approach to ensure the data invitation is delivered and seen
- Making the invitation to customers to share their data highly visible, explicit, and personalized
- Write the invitation in layman’s terms
- Use pre prompts to explain the potential benefits of giving permission for data sharing
Data Security Center
This may sound like an area most companies already have, the difference is that this one should be customer-facing. It’s another step in building consumer trust through transparency. McKinsey suggests you include three core elements:
- A granular list of data that are being collected with a description of how they are being used
- A preference center that enables customers to opt-out of any future data collection or usage
- Rich, regularly updated content around data governance and protection
Think of this like your CRM system (customer relationship management), with an ongoing dialog with customers around data usage. Like the CRM, don’t expect many customers to engage with you directly, but they will see the content and feel reassured that you are taking data protection seriously.
Data Value Proposition
Nearly two-thirds of customers are willing to share information if they see the value in providing it. Do you have a clear compelling value proposition? If not, consider why you’re asking for their data? Think about offers you can provide, how you can improve the customer experience, etc…
Data privacy is going to become more regulated and more important to consumer choice when selecting who they want to do business with. If you need help building a culture of transparency or hiring a data executive, send us a note.