Data privacy is directly linked to customer trust. Customer data collection is a strategy and requirement for businesses but it should be noted that businesses obtain consent from customers before taking and using the data and they are further responsible for maintaining the privacy of that sensitive customer data. Leakage or loss of such data can put a business's reputation at a very serious risk. Read further in the blog about what customer data is, the importance of data privacy, which principles businesses can for building trust through data privacy and its benefits.
Customer data typically refers to any piece of information a business may collect from and about its customers. It can be used for multiple purposes:
This process of collecting customer data in CRM may include:
But as the saying goes, with great power comes great responsibility, businesses are responsible and are expected to handle such customer data with ethical principles to build trust through data privacy.
Customers nowadays are getting more and more aware of their rights and responsibilities and this has also made them selective about which company to choose and associate with. But this aspect has another dimension also. Customer data collection and maintaining privacy can also bring a competitive advantage for businesses.
Businesses that take data privacy seriously can exploit this opportunity and make privacy an important part of their business values and offerings.
There are certain principles that businesses should follow to build trust through data privacy:
Transparency is the most prominent aspect when it comes to customer data collection and its usage. Brands should ensure that their privacy policies are clear and easily accessible to customers. These privacy policies should not contain technical jargon that is hard to understand. Instead, use language that is in layman's terms. Customers should also know about the usage of their personal data.
Privacy should be implemented by design which means that data privacy and protection should be considered at each and every stage of product development. The aspect of privacy should be integrated and reflected in your products, services and the whole process.
More data means more responsibility for maintaining privacy. Hence, businesses should ensure that only necessary information is collected from customers. Policies and processes should be in place to ethically discard pre-collected information that is not required anymore. It helps in reducing the risk of data breaches and enhances customer satisfaction.
Proper functional security measures should be implemented like anti-virus, firewalls, encryption, multi-factor authorisation, etc. These measures should be regularly monitored and updated as and when required. Further, business employees should receive the proper training required to safely use customer data and avoid any accidental data breaches, theft, loss or corruption.
There are specific laws and regulations for customer privacy governing businesses. It is inevitable that businesses are informed about concerned and relevant laws, regulations and guidelines to avoid hefty fines and penalties. It also increases customer satisfaction and loyalty.
Since it is customer data, customers should be empowered with control over their data. They should be offered with option of opting out of data collection or modification. It helps in building customer trust as it makes them feel respected.
Privacy policies should be regularly reviewed and updated in accordance with changing laws norms and ethical standards. Additionally, it is the primary responsibility of businesses to update customers about any changes in privacy policies.
Implementing these principles for building trust through data privacy can bring multiple benefits to the business such as:
Customer data collection is a very important and sensitive aspect that a business has to deal with. Building customer trust through data privacy is a continuous process and responsibility that needs transparency and respect for confidential customer information. By adopting the above-mentioned principles, businesses not only fulfil their legal obligations but also enhance customer satisfaction and gain loyalty from them.