Most companies have been preoccupied for the greater part of the last year preparing for the General Data Protection Regulation (GDPR), which went into effect on May 25, 2018. Millions of dollars have been spent on GDPR-related technologies, legal budgets have increased drastically, and some companies even seriously considered doing away with customer data altogether in order to avoid added cybersecurity complexities.
With the looming threat of enormous fines and legal consequences taking center stage in the buildup to the GDPR deadline, it’s been easy to overlook the fact GDPR actually represents something good. The regulation will drastically improve customer interactions by giving customers complete control over their preferred data-driven experiences. By enabling companies to accumulate and apply more accurate and insightful customer data overall, GDPR provides infinite revenue-generating opportunities for businesses over the long-term.
Now that the May 25, 2018 deadline has come and gone, the path to more fruitful customer-brand relationships is established, right?
Not quite.
The GDPR deadline was not a deadline at all. Rather, it represents step one of the next data frontier that will allow companies to have a trusted dialogue with their customers based on a standard framework for data privacy. The work is just beginning.
Creating a Standard Framework
Prior to GDPR implementation, there was no standard between organizations and customers on managing data privacy. This resulted in little transparency on how data was being used, many related inefficiencies and missed opportunities, and ultimately mistrust between consumers and the brands they interact with. A new framework was needed to rebuild that trust and provide mutually beneficial relationships.
When GDPR became enforced, it provided a crucial first step in this data privacy framework by clearly outlining and providing a standard for how companies are equipped to protect their customers’ data and privacy. It also provides customers a way to inform a company about what data they’re permitted to use – this includes all types of data marketers use to attract new customers, including first-party data (i.e. customer and prospect information collected directly from all channels), second-party data (i.e. partners’ first-party data) and third-party data (i.e. data sold by data management providers and data service providers).
Now it’s time for organizations to re-evaluate the way they handle consumer data and install new processes and technologies enabling the customers’ right to “own” their data.
Data Process Evolution
To reap the benefits of the new data reality set by GDPR, companies need to adjust how they work. In an era of nearly unlimited customer data types and sources – structured and unstructured, factual and behavioral, from digital online and offline source systems, as well as from multiple channels and devices – companies are best served by centralizing all of their data into one integrated system. This will be the key to effective and diligent operational customer data management, which is a pre-requisite for GDPR compliance.
By taking this approach, companies can more easily and efficiently manage customer consent. For example, a company’s marketing team can quickly reference how and when a specific customer’s consent was obtained, and for how long and for what purpose the consent is valid. Should a customer decide they no longer give consent for a particular activity, marketers can more easily manage the changes in use for that customer data.
Centralizing the management of customer data also empowers companies to create a more detailed and holistic view of each individual customer. This type of granularity will impact how effectively companies can proactively manage their customer relationships, so it’s important to keep this information complete, accurate and up-to-date by incorporating machine learning and prescriptive analytics technologies.
A Long-Term Commitment
The reality is, all customers want trust and control over their personal data, and this is precisely what GDPR enables.
With customers knowing exactly how and why their data will be used, they’ll likely be more open to sharing their information. And with more focused, meaningful customer data available, companies can become more knowledgeable about each customer and use that information to create more relevant interactions and offers.
By reframing GDPR from a legal burden to an opportunity to cultivate smarter, more effective customer data strategies and technologies, companies can finally become truly customer centric, which generates greater brand loyalty and a stronger bottom line.
While GDPR is the first, big step toward improving data privacy and customer trust, it’s not by any means the solution. It’s going to be a process — a long, laborious process — but this is the catalyst for the next frontier of customer interactions. Now it is up to organizations to follow through on its promise.
About the Author
Luc Burgelman is CEO of NGDATA. Prior to NGDATA, he co-founded Porthus (EU, 2000), which delivered cloud-based solutions that IPO’d in 2006 and was acquired by Descartes Systems Group in 2010 (US/CA). At that time Luc became the EVP global marketing, product strategy and chairman of corporate planning office (US/CA). After leaving Descartes, Luc observed what was becoming a massive expansion of useful consumer data and realized that consumer-oriented companies would need a solution to store, organize, sift and gain customer insights with what would become known as Big Data. Through his experience in artificial intelligence (neural networks, large data processing, rule-based systems, …) he decided to join forces to create NGDATA. Luc holds a Master in Engineering and Information technology (UGent, BE) and Executive MBA (Antwerp, Kellog, IMD).
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