Meta’s wake-up call: Reimagining data collection, privacy and CX

Consumer data privacy regulations are expanding globally, and the penalties for non-compliance are getting more severe by the day. Just this year, Meta was slapped with a record €1.2bn fine under GDPR when they were found guilty of transferring EU user data to the US without adequate safeguards in place.

But it’s not just about the financial repercussions of a high-profile incident; there’s also an ethical argument for doing everything you can to comply with data privacy rules, simply because it’s the right thing to do.

Companies need to understand that mere compliance is just the floor and that creating personalised, value-based customer experiences anchored in privacy is the ceiling.

To prepare for this new privacy-centric reality where compliance becomes trust and legal gives way to “what’s right,” more and more companies are shifting their focus from third-party data to collecting and using privacy-compliant first-party customer data instead.

But here’s the catch: just because you can collect unlimited amounts of customer data doesn’t mean you should. To cultivate trust with consumers and avoid a privacy scandal akin to Meta’s, it is essential to determine what customer data is absolutely necessary and how it will be used to meet your business and customer experience goals.

Stop the data landgrab

Until recently, a “data landgrab” mentality has prevailed in the industry. Companies have been gathering as much data as possible about their current and prospective customer’s interests, preferences, and behaviours, often without their knowledge and with little consideration as to exactly why they’re collecting that data in the first place.

In fact, a recent Gartner survey found that 60% of marketers believe they need every data point possible to achieve a 360-degree view of their customers and drive personalisation and retention.

But here’s the thing: collecting data without any real purpose isn’t just ineffective and borderline unethical, it can also lead to consumer mistrust and put your company at serious risk of security breaches, cyberattacks, reputational damage, and potentially crippling regulatory fines – just like Meta.

Collecting data without any real purpose isn’t just ineffective and borderline unethical, it can also lead to consumer mistrust.

Moreover, 72% of respondents who believe they need every data point to be successful also believe that the more data they collect, the less benefit they see.

Assessing which customer data you really need for personalisation

Start by defining the minimum viable data (MVD) that’s required based on its relevance and impact on your specific business goals and use cases.

You don’t need every piece of granular information associated with prospects and customers to deliver personalised experiences and drive business outcomes. Instead, let your use cases dictate which data sources and how much data you should collect.

It’s also worthwhile involving different team members in this process. Different departments will have different use cases and data requirements.

For example, marketing and e-commerce teams may require past purchase information, while IT teams might be interested in location-based data to ensure local compliance laws are being met.

Since the answers you need from your data will change depending on whom you ask, you need to plan your customer data strategy out with rigour and in concert with other business stakeholders.

Finally, it’s important to recognise that collected data alone won’t magically transform your business – it's the application of that data that really matters.

Do you have sufficient internal resources and the necessary skill set to collect, consolidate, normalise, and store the data in a privacy-compliant manner? Has it been collected with the meaningful consent that’s required to act on it? Is it easily accessible to marketing, customer experience, analytics, and other growth-focused teams for analysis, segmentation, modelling, and/or activation purposes?

It doesn’t take a genius to drop a ton of money at the grocery store, but that won’t make the meal. You need to know what to combine, in what order, and with what technique to delight your audience.

Remember personalisation is paradoxical

Need more proof that the end of data hoarding won’t spell the end of personalisation, value creation, and business growth? Consider one of the most common use cases for data collection: providing personalised customer experiences in the pre-purchase stage.

Most businesses tend to go all-in on personalisation before a customer makes their first purchase. However, recent research from Forrester shows that this is precisely when consumers tend to trust companies the least and may actually be put off by overly personalised approaches. Even in non-paid channels like email, only 27% of US adults are interested in receiving personalised emails.

Companies must consider the customer's lifecycle stage and find the right balance between personalisation and data collection.

Instead, companies must consider the customer's lifecycle stage and find the right balance between personalisation and data collection.

Customer preferences and their desired level of consent should lead the way, so it’s important to think about where in the customer lifecycle you’re trying to make an impact and whether you have the right data for the type of moment you want to create. If not, design a method to capture this data, such as explicitly asking customers for the data or providing an equitable exchange of value.

An ethical and practical approach

To fulfil the promise of data privacy and safety, businesses should approach data collection with purpose and prudence, focusing on the necessary data for their specific use cases and ensuring it’s collected with meaningful consent.

Aside from the fear of financial and reputational repercussions, there is a very practical reason: by adopting a thoughtful and strategic approach to data collection and utilisation, you can create the kinds of digital experiences we ourselves would like to have, without constantly having to adjust as the bar gets raised across the globe.