4 minute read 6 Jan 2021
Happy woman with tablet pc and credit card at home

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

Authors
Janet Balis

EY Americas Customer and Growth Market Leader and Marketing Practice Leader

Transformation leader in media and marketing. Innovator. Digital native. Change agent. Passionate advocate for women and gender parity. Influencer. Mother.

Erik Larson

EY Americas Customer Experience Technology Leader

Father. Husband. Curator of ideas. Builder of businesses. Analytical Driver.

Angela Saverice-Rohan

EY Americas Privacy Leader

Promotes cross-functional teamwork. Calm and steady in crisis. Wicked sense of humor. Mother of two.

4 minute read 6 Jan 2021

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

In brief:

  • Soon, browsers will no longer support cookies, limiting the impact of third-party data strategies and pushing marketers to rethink their approaches.
  • By offering granular choice and control over data, companies will move in the direction of new laws and align themselves with the preferences of consumers.

At the start of 2020, a business may have been plotting its digitization transformation over multiple years, but when COVID-19 hit, everything changed overnight. Companies rapidly accelerated their digital efforts to lean into harsh new realities and powerful opportunities around customer behaviors and needs. Now, companies must effectively harness consumer data to drive growth while also managing risk in a changing landscape of regulation.

For most companies, consumer data is managed from a position of defense, focused on issues such as regulatory compliance and protection from data breaches. In an EY webcast from December 2020, about 80% of viewers cited risk and compliance or data security as the most critical aspects of their privacy strategies.

Yet consumer data should be used drive growth and differentiate competitively. And as the January 2022 deadline around a “cookie-less” world looms, companies will have to prioritize using first- and second-party data more effectively, because third-party data strategies will decline in value for digital marketing.

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.

Consumer data privacy is about trust and transparency

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.

Consumer data privacy is about trust and transparency

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.

Summary

When it comes to consumer data, complying with regulations and defending against breaches are obviously important. Yet companies can go further by redefining their relationships with customers based on trust and greater choice, in line with their preferences on privacy.

About this article

Authors
Janet Balis

EY Americas Customer and Growth Market Leader and Marketing Practice Leader

Transformation leader in media and marketing. Innovator. Digital native. Change agent. Passionate advocate for women and gender parity. Influencer. Mother.

Erik Larson

EY Americas Customer Experience Technology Leader

Father. Husband. Curator of ideas. Builder of businesses. Analytical Driver.

Angela Saverice-Rohan

EY Americas Privacy Leader

Promotes cross-functional teamwork. Calm and steady in crisis. Wicked sense of humor. Mother of two.