Data Privacy and Personalization: How to Strike a Balance 


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This is a guest post from our partner, Dialpad. 

Personalization is becoming more and more popular with B2B and B2C brands. Consumers are made to feel understood and valued on a personal level, leading to a better relationship with that brand over time. 

However, balancing personalization in an era when more consumers are concerned with data privacy can be challenging. 

Collecting customer data and processing it for personalization doesn’t have to be a problem. By learning how to safely collect, process, and store data, and how you can and cannot use it, you’ll be able to effectively communicate with your customers without breaking the rules. 

Data Privacy and Personalization

Personalization in marketing communications is one of the top customer experience technology trends. It’s popular with consumers because it engages them with a brand on a personal, individual level. It can take many forms, including:

  • Names on marketing emails
  • Personalized offers based on browsing interests
  • Personalized offers for birthdays
  • Advice based on past purchases

It’s clear to see how this is useful for consumers and can result in an extended customer lifecycle and customer retention rates. It’s also clear to see how personalization can contravene data protection regulations if you’re not careful. 

Data privacy and protection laws differ between territories, but there are some general rules that you should follow. These rules will help you to stay on the right side of the law, but also to protect consumer trust in your brand —- consider whether you need a piece of data, not just whether you can collect it. 

These rules will apply at all stages of the customer lifecycle, from customer onboarding to post-sales. 

These are some of the most important components of data protection and privacy to bear in mind:

  • Only collect data that you need;
  • Ask permission before collecting any customer data;
  • Store data securely and only allow access to those who need it;
  • Delete data when asked; 
  • Allow consumers to know what data you hold about them;
  • Don’t use data for a different purpose from which it was collected.

Always check your local data protection laws to know exactly how to apply this advice. 

How to Balance Privacy and Personalization 

Data protection can seem daunting, but following a few simple steps will make sure that you don’t inadvertently break data security rules. In order to use customer data properly, you need to consider what you’re collecting, how you’re storing it, and how you protect and dispose of it. 

1. Be Transparent

Transparency is key to data privacy. Most people don’t actually have a problem with their data being collected. They do have a problem when their data is being collected and used without their knowledge. 

You should aim for transparency throughout every area of your business, from your eCommerce privacy policy to your marketing emails. Whenever you plan to collect and process customer data, you need to make sure that you ask permission and let your customers know how you plan to use their data. 

Consistency is crucial to transparency. This means that you should periodically check that consumers are still happy for you to use their data. You should also be transparent about how you store data, who has access to it, and how consumers can request that you delete their data. 

2. Encourage Consumer Choice

Data collection needs to be the choice of your customer. From a legal standpoint, you must get permission to collect new data on your customers. You must also get their permission to use their data in a different way from which it was collected. For example, if you collect a customer’s name and email from a purchase, you must ask for permission before sending them further marketing emails. 

This might take a number of forms. You should regularly encourage your customers to make an active choice about how their data is used, through, for example:

  • Emails
  • Website popups
  • Social media reminders
  • In-app reminders
  • On-page forms

Be clear, transparent, and honest when communicating with your customers about data use. This might take a number of forms, at the discretion of the copywriter, such as emails, website popups, social media reminders, in-app reminders, or on-page forms.

3. Limit Data Collection

A key component of good data protection is collecting only the data that you need. In some places, this is the law, but it’s always a good idea when it comes to customer trust. Imagine if you were making a purchase and someone asked for your job title or how you voted. You wouldn’t have much trust in that brand. 

Plan out what data you need to collect from your customers before each interaction, and know how you’ll use it. For example, if an eCommerce brand receives a purchase from a customer, they might collect:

  • Name and address —- for shipment
  • Email address — for tracking and confirmation
  • Phone number — for tracking alerts

They should not ask for the following, because they are clearly irrelevant (and in some cases, protected information):

  • Marital status
  • Religious affiliation
  • Sex or gender — with certain potential exceptions if the product relates to health

Limiting data collection also relates directly to how data is collected and stored. You should use a collection system that allows for safe storage and processing on a needs-must basis. 

Cybersecurity is also a critical component of protecting customer data. You should use robust encryption methods and implement strong access controls to prevent unauthorized access to customer data. Regularly monitoring your systems for potential vulnerabilities and conducting security audits can help you identify and address security issues before they become major problems.

Form analytics can also be a helpful tool when it comes to balancing privacy and personalization. By tracking how customers interact with forms on your website or in your apps, you can identify areas where you might be collecting more data than necessary or confusing customers with unclear consent options. This information can help you refine your data collection processes and improve the transparency and clarity of your data privacy policies.

By tracking how customers interact with forms on your website or in your apps, you can identify areas where you might be collecting more data than necessary or confusing customers with unclear consent options.

A great way to engage in data collection securely is to use a password manager. By utilizing a password manager, you can securely store login credentials and other sensitive information, reducing the risk of data leaks and human error.

For example, you might record phone calls for training and security purposes. You should know how to record a phone call and how to store the data for maximum security. But you should also take care not to record and keep data that you don’t need, like names and dates that could be redacted. 

A great way to engage in data collection securely is to establish a dedicated customer contact center. A Dialpad contact center, for example, allows you to store customer communications in one space, securely in the cloud and has integrated security measures available to keep your customers’ data safe. 

4. Put Mitigations in Place

Because data collection and processing involves technology and human intervention, there is always room for data leaks and human error. 

Technology is not infallible, even with the highest security precautions in place. Security measures have risen to prominence among the top technology trends, as they’ve become increasingly sophisticated. This means that you have plenty of options when it comes to keeping your data safe. However, it also means that you need to take the time to understand how these measures work, how to maintain them, and what to do if they fail. 

Human staff are also open to error. You should put measures in place to reduce human error and the impact of mistakes. For example, keep all customer data password-protected, and only give out the password to those who need it. 

You should also avoid allowing team members to store or process customer data on personal computers without a VPN or secure company system. 

5. Build Your Brand

What is data privacy and personalization all about? Building your brand! You want to use personalization to establish your brand as engaging and caring about consumers. You want to follow data privacy guidance to maintain your customers’ trust and avoid penalties. 

When following data protection advice, be public about the steps you are taking and acknowledge broad consumer concerns about data security. 

For example, if you offer remote support to improve customer experience, then your customers may be concerned about how their data is stored. Be upfront and honest about it, and make this a consistent feature of your brand. 

You should never sell or distribute customer data without express permission, because brands that are found to have done this may be penalized and lose the trust of their customers. 

Over time, data privacy will become a known feature of your brand. Work at it consistently and be sure to stay up to date on new data protection laws and technology. Let customers know when you plan to introduce new data privacy rules or when their data is being transferred to a new system. 

6. Foster Privacy Culture

Privacy policies and intentions are a fantastic start, but it’s ultimately down to you and your team to put them into practice. 

Foster a team culture that values customer privacy by implementing data protection policies throughout your company. Protect customer data, but also protect team data. Take opportunities to train and educate team members on data privacy.

A Final Word

Personalization can be a key tool for your brand, particularly for B2C brands with strong customer relationships. It engages customers on an individual level and demonstrates your commitment to understanding your audience. 

However, remember, data privacy is not only important to most consumers but it is written into law. Non-compliance can not only damage your brand image and consumer trust but can result in legal sanctions. 

Following a few simple steps to collect, store, and process data safely will help you to engage consumers with top-notch personalization without breaching data security or brand trust.

Don’t just collect data
— leverage it