Using customer data ethically: how much is too much?

With recent increased measures to protect people’s privacy and data rights, companies are looking to build trust so customers feel comfortable sharing information about themselves.

For marketing, sales and product development teams, customer data provides a rich source of information about their evolving needs and preferences, so companies can hone their offerings and experiences to suit. Without these insights, businesses could lose touch with customers and fall short of their expectations.

Customers realise that if they want a great, optimised experience, they must let companies understand who they are and what makes them tick.

Ethical behaviour builds trust

As long as customers can trust a company to keep their data safe and use it only as permitted, they can engage in a fair exchange: I’ll give you my data if you give me a better service.

There’s plenty of research to support this. Accenture suggests that as many as 91 per cent of consumers will favour brands that recognise and remember them and provide relevant offers and recommendations.

For customers to consent to capture and use of their data, they must understand and trust what the organisation plans to do with it. So it’s important to communicate this clearly.

Even the most guarded customers could relax their privacy boundaries when offered something great in return for their information. Hilton, which is creating personalised experiences for loyalty-scheme members, even puts customers in control of their room choices and preferences via a digital app.

Collect only the data you need

It’s easier to build customer trust if you only ask for the data you really need – and can show how that will be used. Can your organisation justify capturing an individual’s home address and date of birth, for instance, or would an area code and age band suffice?

If you do want to track someone’s location to better tailor and personalise, be upfront in asking for permission and explaining how you will (and won’t) use this information.

Boundaries for bots

In a low-touch context, it can be less obvious when and how companies are capturing customer data. That’s especially true where customer experiences are managed using AI, or where customer activities are tracked to enable a more tailored service.

This is something the European Parliament and other international authorities are looking into. Policy-makers want to ensure that tracking of individuals, or potential bias in AI algorithms, doesn’t open a whole new can of worms for personal privacy and fair treatment.

Major technology players are working with government bodies to address these issues; but it’s still important to check that your technology and service providers have controls in place to minimise potential risks as you monitor customers digitally.

One way to avoid overstepping customer boundaries is to track customer trends without identifying individuals. Use our mobile/location analytics services for example, or take a cross-section of anonymised feedback from across public social forums.

During the pandemic, we’ve been exploring how to use data to help understand the spread of COVID-19, without encroaching on individuals’ privacy.

There’s always a fine line to tread when collecting personal data. So keep a close eye on the regulations and seek out technology partners that understand the issues – and can help you distil the insights you need without overstepping the mark.