Consumer data privacy regulations are expanding globally, and the penalties for non-compliance are getting more severe by the day. Just this year, Meta was slapped with a record €1.2bn fine under GDPR when they were found guilty of transferring EU user data to the US without adequate safeguards in place.
But it’s not just about the financial repercussions of a high-profile incident; there’s also an ethical argument for doing everything you can to comply with data privacy rules, simply because it’s the right thing to do.
Companies need to understand that mere compliance is just the floor and that creating personalised, value-based customer experiences anchored in privacy is the ceiling.
To prepare for this new privacy-centric reality where compliance becomes trust and legal gives way to “what’s right,” more and more companies are shifting their focus from third-party data to collecting and using privacy-compliant first-party customer data instead.
Stop the data landgrab
Until recently, a “data landgrab” mentality has prevailed in the industry. Companies have been gathering as much data as possible about their current and prospective customer’s interests, preferences, and behaviours, often without their knowledge and with little consideration as to exactly why they’re collecting that data in the first place.
In fact, a recent Gartner survey found that 60% of marketers believe they need every data point possible to achieve a 360-degree view of their customers and drive personalisation and retention.
But here’s the thing: collecting data without any real purpose isn’t just ineffective and borderline unethical, it can also lead to consumer mistrust and put your company at serious risk of security breaches, cyberattacks, reputational damage, and potentially crippling regulatory fines – just like Meta.
Collecting data without any real purpose isn’t just ineffective and borderline unethical, it can also lead to consumer mistrust.
Moreover, 72% of respondents who believe they need every data point to be successful also believe that the more data they collect, the less benefit they see.
Assessing which customer data you really need for personalisation
Start by defining the minimum viable data (MVD) that’s required based on its relevance and impact on your specific business goals and use cases.
You don’t need every piece of granular information associated with prospects and customers to deliver personalised experiences and drive business outcomes. Instead, let your use cases dictate which data sources and how much data you should collect.
It’s also worthwhile involving different team members in this process. Different departments will have different use cases and data requirements.
For example, marketing and e-commerce teams may require past purchase information, while IT teams might be interested in location-based data to ensure local compliance laws are being met.