Turning Data Risks into Customer Rewards: Strategic Insights for Customer Centric Brands

It's time for brands to get serious about their data protection obligations if they want to offer customers a personalised experience.

Customer centric brands put their customers at the heart of everything they do, using their data to develop innovations and personalise brand experiences and interactions with customers. However, this reliance on customer data brings a heightened responsibility to protect it.

In a connected world, almost all customer data can be classified as personal and anonymity is increasingly elusive. Marketers face risks and opportunities with customer data as they balance control, privacy and security with innovation.

With the new UK government still working on the legislation for the 'UK GDPR' (most recently named the Digital Information and Smart Data Bill) brands must adhere to the key principles set out by GDPR when processing personal data:

1. Lawfulness, Fairness and Transparency

2. Purpose Limitation

3. Data Minimisation

4. Accuracy

5. Storage Limitation

6. Integrity and Confidentiality

7. Accountability

For customer centric brands, taking data protection beyond a regulatory box ticking exercise and building trust-based relationships with their customers can be advantageous. By being transparent about data practices, offering robust security measures, and giving customers control over their data, brands can differentiate themselves in a crowded marketplace.

Strong data protection practices can also enhance customer loyalty. When customers trust that a brand will protect their personal information, they are more likely to engage with that brand, share their data, and remain loyal over time.

Moreover, as data privacy concerns grow, consumers are becoming more discerning about which brands they engage with. Customers expect brands to not only provide value but also safeguard their personal information.

Data breaches can have severe consequences for customer relationships. According to PCI Pal research, 44% of consumers in the UK claim they will stop spending with a business for several months after a breach, and some 41% claim they will never return to that business.

Brands that demonstrate their commitment to safeguarding customer data have an opportunity to build a relationship with their customers that is built on trust, driving customer loyalty.

How can brands improve compliance:

Establish a Data Governance Framework

• Data Mapping: Conduct comprehensive data mapping to understand what data you collect, how it is stored, processed, and shared. Knowing your data flows is the first step in ensuring compliance.

• Data Minimisation: Implement policies to collect only the data necessary for your operations. Regularly audit your data collection practices to ensure they align with the principle of data minimisation.

• Retention Policies: Develop clear data retention policies to ensure that personal data is not kept longer than necessary. Regularly review and purge data that is no longer needed.

2. Enhance Data Security Measures

• Encryption: Use encryption for sensitive data to protect against unauthorized access and ensure that only authorised personnel have access to personal data.

• Regular Security Audits: Conduct regular security audits and vulnerability assessments to identify and mitigate risks.

3. Employee Training and Awareness

• Regular Training: Provide ongoing training for employees on data protection laws, company policies, and best practices. Training should cover GDPR principles, the importance of data protection, and how to handle personal data securely.

• Role-Specific Training: Tailor training programs to the specific roles within the organisation, ensuring that all employees understand their responsibilities concerning data protection.

4. Implement Data Protection by Design and Default

• Privacy Impact Assessments (PIAs): Conduct PIAs for new projects or processes that involve personal data. This ensures that privacy risks are identified and mitigated before the project is implemented.

• Privacy by Design: Incorporate data protection principles into the design of new systems and processes from the outset.

5. Engage with Data Protection Officers (DPOs)

• Appoint a DPO: Consider appointing a Data Protection Officer (DPO) to oversee compliance efforts, manage data protection strategies, and act as a point of contact for data subjects and supervisory authorities.

6. Improve Transparency with Customers

• Clear Privacy Policies: Ensure that your privacy policies are clear, concise, and easily accessible. They should inform customers about what data is collected, how it is used, and their rights regarding their data.

• Consent Management: Allow customers to easily opt-in or opt-out of data processing activities. Ensure that consent is obtained in a manner that is clear and unambiguous.

7. Regular Audits and Compliance Checks

• Internal Audits: Conduct regular internal audits to assess your organisation's compliance with data protection laws. Audits should cover data processing activities, security measures, and employee adherence to policies.

• Third-Party Audits: Consider engaging third-party auditors to provide an unbiased assessment of your compliance policies and procedures.

8. Stay Informed and Updated

• Regulatory Updates: Keep up to date with changes in data protection regulations and adjust your policies accordingly. This is especially important in a rapidly evolving regulatory landscape.

• Industry Best Practices: Participate in industry forums, attend conferences, and engage with professional networks to stay updated on best practices and emerging trends in data protection. Assign responsibility to someone in your organisation who can keep up to date and then disseminate the information to others.

9. Incident Response Planning

• Breach Response Plan: Develop and regularly update a data breach response plan. The plan should outline the steps to be taken in the event of a breach, including notification procedures to regulatory authorities and affected individuals.

As brands continue to leverage customer data to push innovation and personalisation, they should do so with data protection at the forefront of their minds. Embracing GDPR principles helps ensure that customers feel secure and valued, ultimately enhancing the overall brand reputation and driving business success.