In 2019, a Pew Research Center report found that approximately 79% of consumers expressed concerns about how their personal data was being used by companies. From there, 81% of consumers believed the risks of data collection outnumbered the benefits.
Why are privacy concerns becoming more prevalent?
The pandemic increased the number of people concerned with the collection of their private data because a higher number of people were using the internet for work-related purposes. Likewise, more people were purchasing goods and services online, which may have increased their concerns.
People’s skepticism provides a backdrop to the customer experience (CX) model many companies are using to increase customer satisfaction and learning to live with a cookie-less future.
By 2023, Google will eliminate cookies and institute Topics, which supports interest-based advertising. A person’s browser will determine a handful of broad topics based on their browsing history.
These topics will remain active for three weeks and then be deleted. One topic from each of the past three weeks will be shared with the site and its advertising partners. User controls will allow users to see the topics, remove any they do not like or disable the feature completely. Companies will not be able to track individual users.
Apple has already outlawed the use of unauthorized third-party cookies via its Safari web browser. It also requires apps running on its devices to get consumer permission prior to tracking their activity on other apps and websites alike. This has made ad campaigns less effective and harder to measure. As such, CX is a logical result.
The CX model relies on data-driven, predictive systems to give them a competitive advantage. Strong CX strategies allows companies to balance customer concerns about data privacy with collecting the data they need to provide a positive customer experience.
Three issues regarding privacy concerns.
- Transparency. While the United States does not have a comprehensive federal law ensuring data privacy, complying with the spirit of international legislation as well as individual U.S. state legislation can go a long way toward creating trust with consumers. The European GDPR, Brazil’s LGPD, the comprehensive consumer privacy laws enacted by California, Colorado and Virginia provide examples of legislation that explains users’ rights about their data:
- Users who understand what data is collected, why it is collected, how it is kept and for how long are more likely to trust the company collecting it.
- Giving consumers the ability to opt out of providing information empowers them to consent to having their data collected, or not.
- Providing a path for data privacy inquiries is an additional way of giving users the ability to feel secure about sharing their information.
- Collaboration. Companies that truly want to invest in a robust CX experience need to create a privacy strategy reaches across the company to include departments as diverse as IT, legal, marketing, sales and customer service. Each of these departments has its own perspective on CX, and their collaboration can lead to better processes, agility, and innovation. In addition, everyone at the company needs to be trained in how to maintain customer privacy and what to do if they suspect a breach.
- When is it too much? According to a recent McKinsey survey, about 72% of respondents said they expect businesses they buy from to recognize them as individuals and know their interests. Personalization is not a one-size-fits-all strategy. It all depends on the product you are selling and demographics. For example, the Pew survey found that only 19% of Americans 65 and older believe they benefit from the data companies collect about them. Customers want personalization, but they do not want brands to know too much about them.