Cyder’s recent discussions with finance leaders highlight a growing divide between corporate data needs and consumer privacy demands. Financial institutions are actively seeking privacy-forward solutions that empower customers with ownership and autonomy.
Data is essential to making informed business decisions. Organizations that strategically leverage data in their operations are more likely to succeed in achieving their business goals. However, consumers are more privacy-conscious than ever before. According to The Harvard Business Review, 97% of consumers surveyed expressed concerns about how organizations use their data.
Maintaining consumer trust is essential to corporate growth, requiring businesses to seek solutions that balance data needs without compromising their customers’ trust.
Traditionally, companies collect as much data as they can to understand customers. Yet the data they collect is often incomplete, and its accuracy is questionable. According to Deloitte, two-thirds (66%) of data professionals surveyed report third-party data to be 0 to 50 percent accurate.
Clearly, businesses are struggling with acquiring reliable data. These challenges will continue as newer privacy regulations emerge. Corporations must open pathways to solutions that meet their data needs and respect consumer privacy. Here’s how you can do it.
Educate Your Customers
Trust starts with education. Customers are more receptive to brands when they know how their information is used. Informing customers about your business’s data protection measures boosts their loyalty and trust.
Additionally, businesses should inform customers on how their privacy is being protected. Privacy is now synonymous with good customer experience, as 90 percent of consumers associate the treatment of their data with how they’re treated as customers. Furthermore, data practices are now seen as a direct reflection of business ethics. This shows that consumers are more willing to support companies that hold themselves accountable and value their customers.
With the variety of direct-to-consumer communication channels available, informing customers yields big results. Consider using social media, email, blogs and webinars to reach and educate customers.
Gather Only Relevant Data
Less is more. Research indicates that excess data hurts business decisions, with 87 percent of leaders experiencing decision distress. Excessive amounts of data require lengthier analysis times, more resources, and pose challenges in identifying useful information. Concentrating on relevant data prevents overload, guarantees data quality, and streamlines the decision-making process.
The Mozilla Foundation analyzed the privacy policies of 25 popular car brands, deeming it the worst product category for privacy. Automotive brands were found to collect an excess of highly sensitive information without customers' knowledge, including data on users' genetic information and sexual activity.
When reports like Mozilla’s get published, it sends a message that these companies have little to no respect for their customers' privacy. Consumers value their privacy and want to support organizations that respect them. Excess data collection harms reputation and complicates the decision-making process.
Exclusively gathering relevant data creates opportunities for greater accuracy, as brands can pivot to collecting zero-party data. Zero-party data is data that customers intentionally and directly share with a brand.
Leveraging zero-party data carries immense benefits as businesses receive accurate data that directly supports their initiatives. For instance, sending out a survey asking customers their thoughts on a product provides highly relevant insights that help businesses steer forward.
Provide Value For Data
In our digital economy, data is the currency that powers the online platforms and services we use. It’s a highly valuable resource for business operations. Consumers recognize their data's importance to businesses.
Future trends indicate that involving customers is advantageous to driving growth as ownership over data increasingly shifts to consumers. Businesses must look for ways to build mutually beneficial customer relationships by providing value in exchange for data.
Providing value doesn’t necessarily have to be tangible or monetary. Offering value for data through experiential or functional means is just as effective. Customers can receive value for their data in exchange for personalized experiences, exclusive offers, and time-saving recommendations. This way, businesses can meet their data needs while elevating customer experience.
Take PC Optimum, for example. Customers receive points and personalized offers when using their Optimum card in exchange for their data. PC Optimum gets valuable insights into their customer's purchasing behaviours, improving their services. On the other hand, it benefits their customers as they save money and time through the discounts and services they receive.
Give Customers Control Over Their Data
Data ownership isn’t just a buzzword; it’s a solution to the changing data ecosystem. Customers are more receptive to sharing their data when they feel in control of their privacy. Giving customers control over their data builds trust between corporations and consumers, which in turn boosts opt-in rates for personalized experiences that align with customer needs.
Rogers’ Preference Center is an excellent case that highlights how giving customers agency benefits business growth. Rogers gives their customers granular control over the email communications they receive. Rather than being spammed with bulk emails, customers can opt out of emails they deem irrelevant. In Rogers’ case, customer control leads to increased engagement and reduced unsubscription rates.
Another example is our data approach at Cyder. Financial institutions partner with Cyder, sending out our browser extension to their customers. Once downloaded, browsing data is kept safe and secure in a vault. Customers can choose the information they wish to share and earn rewards in exchange, allowing financial institutions to access real-time user data while empowering customers with control over their data.
Future Steps
Efforts to meet corporate data needs must focus on sustainable solutions beneficial to all parties in the data ecosystem. Businesses can develop mutually beneficial approaches that boost growth by educating customers, leveraging transparent data practices, providing value, and giving customers control over their data.
Balancing consumer privacy with data needs may seem challenging, but Cyder makes it simple. Our platform is designed to bridge the data gap, providing businesses with permission-based, real-time data.
If you’re looking for a privacy-focused solution, we encourage you to book a demo with Cyder.