With the introduction of the California Consumer Privacy Act (CCPA) this year and GDPR in 2018, the age of data privacy has begun, bringing the opportunity for businesses to harness it to gain competitive advantage.
There are both challenges and opportunities for businesses that aim to deliver superior customer experiences while adhering to data privacy regulations.
Data privacy protection concerns are driving new regulations around the world. As they act to protect data privacy online and improve personal data protection, companies that go beyond minimal adherence to all the new requirements can build trust with consumers and users and stand out from their competitors.
GDPR and CCPA can be regarded as significant motivators for organizations to prioritize data processing and management procedures. For businesses, the challenge of leveraging data to fuel next-generation artificial intelligence-powered CX while protecting data privacy never has been more paramount.
What Does CCPA Mean for Your Business?
Since the rise of GDPR, California devised its own approach to protecting consumers’ data. As the world’s
fifth-largest economy, California has the potential to influence similar legislation across the rest of the U.S.
CCPA covers companies doing business in California that fit one or more of these criteria:
- Have annual gross revenues of more than US$25 million dollars;
- receive or share the personal information of 50,000 or more California residents, households or devices; or
- derive 50 percent or more of their annual revenues from selling California residents’ personal information.
Failure to comply with the rules set out by CCPA can trigger heavy consequences, including hefty fines.
CCPA has created compliance obligations for companies in regard to their collection, processing, storing and transferring of consumer data. As a result, the conversation surrounding data privacy has become more prevalent.
Some of the obligations set out by CCPA, in relation to California residents, may require companies to do the following:
- Disclose what personal information they collect and why, how, and with whom the they will share it;
- Allow residents to opt out of allowing the company to share their personal information;
- At a California resident’s request, delete or provide access to the individual’s personal information;
- Obtain opt-in consent for minors under the age of 16;
- Obtain parental consent for minors under the age of 13;
- Provide a toll-free number and a “do not sell my personal information” feature on their website for residents to exercise their CCPA rights.
While businesses adjusting to this new directive may be inclined to label CCPA as overly stringent and inflexible, they may be overlooking the merit it brings to the customer experience. Rather than something to be feared, a regulation-compliant privacy policy can be a tool that brings you closer to your customers.
We have seen modern consumers becoming increasingly demanding and expecting streamlined purchase journeys, customer-focused experiences, and more control over how, when, and where their information is shared.
With CCPA in play, one easily can presume that businesses will be able to build a database of customers who want communications. Consumers willing to share personal data in exchange for enhanced experiences may be more likely to engage fully with your brand and place a firmer belief in your offering.
The principle of custom CX is anchored in the idea that in exchange for enhanced experiences tailored to their specific needs, customers may opt to sacrifice some level of data privacy to companies they trust.
When taken advantage of, CCPA can help you build trust and transparency with your audience.
Trust and Transparency
Trusting companies with personal data has become a big concern for a lot of today’s consumers. This lack of confidence stems largely from the fact that consumers release their data without an understanding of how that information will be utilized or a high level of trust that it will be safeguarded.
In fact, in a recent
study, 81 percent of U.S. adult participants felt they had very little to no control over the data that companies collected about them. Seventy-nine percent were very concerned about how companies used the data they collected, and 59 percent felt they had very little to no understanding about what companies did with the data collected.
Earning trust from consumers can be paramount for businesses that wish to keep their current customers and gain new ones. Transparency and great customer experiences can help build trust among key audiences. When a company takes responsibility for how it collects, manages and protect customer data, it shows customers how seriously it regards their information.
This approach appears to have been tried and tested. Research from Gartner indicates that brands that put users in control of how their data is collected and used reduced customer churn by 40 percent and increased customer lifetime value by 25 percent. In addition, 75 percent of global consumers said they would stay with a brand they trusted, and 76 percent would recommend a brand they trusted.
By enhancing data privacy, a company can boost its brand reputation and reduce customer churn, as well as potentially avoid costly fines and legal battles.
How Can You Adhere to Best Practices While Improving CX?
Customer experience appears to be very much at the front line of data protection. Therefore the two should work hand-in-hand in an organization. Today, businesses may prefer to rely less on advertising and more on the customer experience to win and keep loyal customers.
Customer service teams and CX features on e-commerce websites engage and interact with consumers on a daily basis, accessing and using personal information entered into a company’s system.
There are four key steps organizations can take with the expectation of some tangible level of success.
- Improve security
Protecting consumer data always has been essential, and that responsibility has grown with CCPA’s arrival.
Several of the biggest technology companies already have invested in the development and improvement of their data privacy practices. Most recently Google announced that it added new voice commands to allow people more control over their privacy. Facebook announced a new version of its Privacy Checkup tool to help users with their key privacy settings.
- Provide Transparency
When consumers question how a company uses their data, being forthcoming and transparent with the information is key. Ensuring you have a complete and accurate privacy statement, and that your customer service teams are trained properly may go a long way not only toward compliance with CCPA, but also toward establishing transparency and building trust.
- Structure Processes Correctly
An essential part of meeting CCPA regulations is to make consumers aware of what a company will do with the data it collects at the beginning of the data collection process.
Thus, you may want to confirm that you have the correct data capture and management processes in place.
- Review Operations
Processes required under the CCPA should be reviewed and integrated into any existing operations to ensure functionalities and triggers are in place.
By implementing these functionalities, companies can maximize their ability to follow best practices when engaging with customers.
The Long Game
Organizations should optimize their commerce technology platforms and data management processes to ensure they are clear and transparent.
In the age of the Experience Economy, organizations should hone their capabilities to deliver exceptional CX and improve their engagement strategies with consumers.
Data privacy and management can offer a strategic advantage for organizations that embrace it to deliver exceptional experiences while fostering transparency and trust with customers.
Justin Duling is senior vice president at
Loqate, a GBG solution. Disclaimer: All views or opinions expressed in this article are those of the author and do not necessarily reflect the official position of Loqate Inc., or any of its affiliated entities, and should not be relied upon as legal advice.
