How ethical personalization can enhance trust and unlock savings

Rob Katz Profile picture for user Rob Katz September 20, 2022 Audio mode
Summary:
There's a fine line in consumer perception between personalized marketing and creepy data use. Rob Katz of Salesforce discusses how to strike the ethical balance between personalization and privacy.

Business people studying code of conduct paper vector illustration. Office people working on company ethical integrity document on laptop screen. Code of business ethics and values © BRO.vector - Shutterstock
(© BRO.vector - Shutterstock)

From delivering customer support to special offers after customers have browsed certain products, businesses rely on personalized digital experiences. Whilst customers appreciate thoughtful personalization, however, many if they get the sense they're being spied on.

According to research from tech industry analyst firm Valoir, one in three consumers believe marketing has gotten “way too creepy.” Only one in four consumers believe they understand how website cookies work.

Marketers face their own challenges when it comes to balancing engaging personalization and privacy, not least from regulators. For those operating globally, to comply with new and constantly evolving guidelines means investing in different platforms and regimes across multiple jurisdictions.

As consumers grow more aware of data privacy, ensuring their peace of mind is essential to companies’ unlocking the benefits of personalization. Having the right software is key to ensuring that data are managed properly, boosting marketer and developer productivity, and availing of opportunities to build better customer relationships.

Striking the right balance between personalization and privacy

According to Salesforce’s 2022 State of the Connected Customer Report, 52% of customers expect offers to always be personalized. Yet 74% of consumers feel companies collect more personal information than they need and 64% feel companies aren’t as transparent as they should be when it comes to personal data use.

Personalization and privacy don’t have to be at odds. Leaning into ethical data tools and services can be an essential design principle for ensuring digital experiences are built to enhance trust. There are four key ways that companies can unlock value and savings from implementing ethical personalization.

Create consumer-facing data policies and practices, and communicate these in simple, understandable language. For brand and operational consistency, companies should also implement these policies at all levels - not just into training or guidance but in the software itself. By embedding privacy and ethics principles into data collection, use, and retention and expiration processes, everyone across the organization can understand and focus on differentiated and ethical customer engagement.

Decrease the data “productivity tax” to free up marketers’ time. It’s estimated that marketers are losing between eight percent and 12% of their overall productivity time to inefficient data management tools and processes. By carefully designing the way data are collected, retained and used, businesses can cut this productivity tax and free up teams’ time to deliver personalized experiences instead. 

Keep more first-party data. Having a complete view of the customer enables organizations to tailor communications to their specific needs and interests which will drive incremental sales and margins. Yet, on average, companies lose eight percent of their first-party data due to time spent cleaning, preparing, and managing. By improving tools and communication with customers about data collection, organizations can avoid throwing away this valuable information.

Outsourcing data management creates efficiencies. Valoir estimates that up to 10% of developer time will soon be required to address complex ethical and privacy compliance requirements. By outsourcing to third-party software providers like Salesforce, developers can save time and marketers can better manage their data. That adds up to as many as 40-50 hours per month of unlocked engineering capacity.

Maximizing value for businesses and consumers

Consumers are more likely to do business with companies they trust. Whilst data can be incredibly valuable for improving the customer experience, it’s imperative that it is used ethically and responsibly. The more transparent they are about their personalization strategy, the easier it will be for customers to understand what data they should provide and how it will be used.

By building safeguards and protections into products and practices, partnering with engineering and product teams to consider the privacy implications, working closely with customers to explore thoughtful data collection, companies can deliver remarkable experiences for their consumers while deepening trust.

With the right mindset, partners, and technology, privacy and personalization can work hand-in-hand.

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