Why consumer privacy is a differentiator, not just a compliance risk

When you’re not just on the defensive, thoughtful data strategies can optimize marketing outcomes and act as a differentiator in the market.

The best ways to build proactive growth strategies using consumer data continue to put risk and compliance at the center, while recognizing that consumer trust is of paramount importance. This is driven by how companies secure consumer data and use it ethically. But there is upside if we also begin to build consumer data strategies to optimize outcomes and even differentiate through our approaches to privacy.

Reinforcing trust

Beyond data breaches, consumers tell us that their main concerns about their data involve its ethical use, such as whether it’s shared with third parties without their knowledge or if a company has collected more data than it needs. A framework on ethical data usage and rigorous approaches to data security are the two critical drivers of reinforcing trust. In the EY webcast, almost 85% of respondents indicated that data ethics is moderately or very important to their consumers.

Optimizing outcomes

Consumer data is fueling more effective marketing strategies and more intelligently orchestrated customer journeys. Chief marketing officers are aggressively accelerating first-party data strategies, particularly as they work to decrease their reliance on third-party data before the browser changes in January 2022.

Marketing is seeing an overall shift as customer relationship management efforts and media strategies become more deeply integrated. As a result, companies are using first-party data to power important use cases like email marketing or personalization, but those efforts also bring better effectiveness and efficiency from their overall media spend.

Beyond marketing, that same consumer data offers the opportunity to connect the full customer journey, putting the humans at the center. From acquisition, to conversion, to experience, to customer care, different elements of the journey can be made more relevant and anticipatory using consumer data. And the less friction there is in the journey, the more likely that prospective customers become loyal customers with the potential for higher lifetime value.

Differentiating through privacy

Giving individuals granular choice and control over their data is becoming much more of a requirement under the law — so why not use this approach now to create a more navigable and transparent exchange with the customer? Among respondents in the recent EY webcast, almost half only found their privacy policies moderately clear and 29% found the policies slightly clear or not clear at all.

Companies have an opportunity to create a better user experience around user consent in privacy, not simply a long scroll of text with a unilateral agreement. Consent of the future affords us the opportunity to create a more creative interface with more meaningful human interaction, more modular decisions and dynamic controls.

In moving this direction, leading companies will have the opportunity to differentiate themselves and ultimately their brands. Already there are leading technology companies that put privacy at the core of their experience and commercially express their commitment to those values. 

Balanced strategies for the future

The only certainty is that the external landscape will continue to change, and the four external forces companies cannot control today will remain uncontrolled: technology shifts, government regulation, consumer behavior and preferences, and the continued threat of cyber attacks. By adopting more balanced and holistic approaches to consumer data strategy and privacy, companies have the opportunity to move fast, be safe, build trust and grow confidently.