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Data is king in CX - but do the means justify the ends?

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To coincide with Data Privacy Week, Nina Müller of the Ethical Commerce Alliance explains how organisations need to adopt a radical stance on data transparency to benefit their customers - and their reputations.

24th Jan 2023
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Businesses have increasingly put brand purpose at the heart of their storytelling, with customers now looking to spend their money with brands that align with their own values. Brands across retail have taken on societal issues from sustainability to diversity and inclusion.

However, as we experience our lives increasingly through the digital sphere, how businesses operate in this space is of growing significance but often neglected. In particular the protection of personal data and online privacy is an afterthought for far too many businesses. 

Consumers digital rights must be aligned with brand’s values and ethos’ in order for businesses to holistically communicate these purposes. This can’t happen without transparency around data practices and respect for the people behind the data. As we increasingly look to business’ social responsibility and impact, this issue must take on much greater importance for all businesses. 

How intrusive data practices impact businesses and individuals

As businesses try to cut through the noise to reach consumers through personalised experiences, data has become a crutch. Whilst providing consumers with improved and tailored experiences, the current model is so reliant on personal data, that it can jeopardise a brands social responsibility. 

Individuals should expect to be the owners of all their personal data and to be given the choice of whom to share it with. Sharing information collected with third party advertising providers harms this digital right, yet it is a common practice. It’s no surprise that the majority of Brits are worried about their data being tracked, captured and sold on to advertisers. 

Businesses feel this impact too as over half of consumers will change their shopping habits to avoid businesses from tracking their purchases through cookies. Not only are consumers sheltering themselves from this brand behaviour, but their affinity towards brands who have this mindset are significantly derailed. 

Cultivating a relationship that isn’t built on reciprocal interest will only damage a brands recognition and reputation. The customer deserves more respect and trust to make the right choices as it’s in their interest the right products as well. Presenting random adverts to consumers based on outdated information is not supportive, just a strain on marketing budgets. 

How brands can better protect online consumer data 

For any brand that aims to elevate its standards, data protection cannot be neglected. To safeguard consumers' data, we must see a mindset shift. One that is less focused on short-term profits, but rather centred around the customer, meeting them with honesty, transparency and respect. 

A first simple step to achieving this is assessing the data that is collected and processed: Which ones are actually needed? Which trackers and analytics tools are in use? Letting go of lots of unnecessary personal data processing liberates businesses from the baseline GDPR alignment and gives more space of action. Going beyond the GDPR baseline also means being protected from data leaks and potential lawsuits.

Another way of transforming your data standards are a check of privacy policies: They should contain plain language, so that customers can understand its meaning in context and feel their data is handled transparently. This goes back to the mindset needed to align brand behaviour with purpose - privacy is a social responsibility not just a legal or even fiduciary duty.

Protection around consumers' data is essential to achieving true brand purpose. As we re-evaluate and educate consumers around ways to protect their online data, businesses must embed respect, control and transparency into their processes.

A radical stance on data transparency goes a long way

We’ve all heard the phrase ‘data is king’ but brands and businesses that continue to implement intrusive practices need to ask themselves does the end justify the means? 

To really highlight purpose as added value to consumers, they need to see a radical shift in the way business is done. The old saying was ‘content is king’ but brands like Lush have shown consumers that this doesn't have to be the case with their social media black out. Despite this, they remain to be a leader in the cosmetic industry. Patagonia has gone a step further putting sustainability and environmental issues at the very heart of what they do and every business decision. They have shown that business success can be achieved alongside having the strongest ethics and values guiding and informing how a business operates. 

Many companies appoint Corporate Social Responsibility (CSR) officers to help businesses extend their responsibility as an entity catered towards society in the way Lush or Patagonia has done so. A large part of this responsibility includes protecting customer data to re-establish trust at the heart of any commercial transaction.

This same progressive mindset must be applied to ecommerce businesses and it can have a wide-spread impact on society. There are regulations in place through laws and bills such as the Online Safety Bill or the Digital Markets Act, but these simply exist as a skeleton. It’s the businesses that give these legal frameworks life and they have the opportunity to build safer online ecosystems through enhanced data protection. 

A newfound respect and loyalty can be found for businesses by removing cookies and consent banners as a whole. By aligning words with actions, businesses values and ethos can come full circle. With social media companies like Instagram and Facebook showing consumers just how low the standards for ethics are, tipping the scales and taking a progressive stance will resonate strongly with consumers.

Businesses have also increasingly begun to understand that they have a wider societal impact and ultimate responsibility. It’s vital that we embrace business as a force for good, and to fully realise the ambition that the adoption of transparent and non-intrusive data practices are crucial. 

 

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