Collecting customer data, ranging from location to browsing habits, has become the norm for many companies that often use this data to target ads.
While this is a central tenet of online advertising, many companies unfortunately don’t take the most transparent approach when it comes to how they deal with customer data.
The fact of the matter is, customers should always have the option to opt-in to their data being shared and collected, and they should also always be fully aware of how and where their personal data is being used.
The state of Maine recently rolled out a law requiring internet service providers to obtain consumer opt-in before their data can be used for ad targeting.
This was a major win for consumers, who have been vying for greater data privacy. But in order to ensure that customers are being treated fairly, it can’t stop with Maine.
Other states should move to protect their consumers and ensure that companies are always acting in their customer’s best interest when it comes to personal data.
This means that people should have full control over what data they share, and a full understanding of what sharing their data means.
Being fully transparent about what data is being collected and how it will be used once a customer opts-in is one of the best ways a company can build trust with consumers.
When customers are completely aware of how their data and assets are being used, they’ll be more likely to trust a company with that data in the first place, yet only 55 percent of customers say they understand how companies use their data.
And trust is vital. It leads to more customer loyalty, greater customer advocacy, and an increase in spending and purchases by the average customer.
As long as the company is using the data to bolster the customer experience and provide value to the customer, they shouldn’t worry about customers choosing not to opt-in.
In fact, 86 percent of customers say that they’re more likely to trust a company with their personal information if the company can explain how they’re using their data to provide a better customer experience.
When you single out millennials and Gen Z, this number jumps to 91 percent, meaning that the youngest and most digitally savvy group of customers are even more likely to trust a brand with their data provided they benefit in return with a better experience.
Once a company establishes a standard and transparent opt-in process, and clearly states what data is being collected and why, they must also make sure opting out is just as easy.
A customer should be able to opt-out of sharing their data at any time, for any reason. They shouldn’t have to jump through endless hoops or ensure a convoluted process to get there.
Aside from the obvious loss of customer trust, there are several pitfalls that companies will face if they fail to be transparent in their opt-in process.
If a company can’t articulate exactly what a customer stands to gain by giving them the right to collect personal data, then they probably aren’t using it for a good reason in the first place and will deliver a poor customer experience.
Being targeted for ads alone shouldn’t be the only benefit either. There needs to be an actual improvement to the customer experience. Whether it be selected personalized offers based on customer choosing, new software features for free or specific tailored offers and benefits.
In addition, ads using personal data should fuel an improved customer experience – always. Only then customers will be willing to opt-in. If they can’t perceive a real benefit from the data they’re sharing, then they’ll surely quickly opt-out and lose trust in the company.
Ultimately, having an obvious, detailed, and transparent opt-in process is the only way companies will succeed long term when it comes to collecting customers’ personal data.
Maine has the right idea with its law requiring ISPs to have customers opt -in to data collection, and it should be emulated across the country. Customers should always be fully in the know and in control of their data – it’s theirs, after all.
A tech-savvy entrepreneur and a web and technology enthusiast, ever since his appointment as Luminati Networks’ CEO, Or Lenchner has continued to expand the company’s market base as a leading online data collection operator. Luminati’s first and foremost mission is to maintain the openness, transparency and integrity of the digital ecosystem.
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