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Using GDPR to Gain Customer Trust


Using GDPR to Gain Customer Trust

Author: Gemma Lacby


If you’re a business owner, you will likely already know that from May 25th 2018 all EU companies will need to comply with ‘General Data Protection Regulations’ or GDPR. But what does this actually mean for your company? If used in the right way, it could potentially help your business.

One of the first places to start is getting clued up. Governing bodies and informative sites, such as the Information Commissioner’s Office and Informi, offer helpful, free information on how to make sure your company is complying with GDPR legislation.


Change in the market

The use of personal digital data has transformed the face of marketing over recent years. For instance, online tracking technology has allowed the development of ads that are targeted to customers based on their behavior online rather than marketers’ assumptions about their target market that are estimated to be around twice as effective.

This is great news for marketing but has been less well received by the public. The majority of us will have experienced the jarring sensation of seeing advertisements on Facebook for products we have researched in the days preceding it. It has even lead some people to suspect that companies such as Facebook use the microphone to listen in on conversations in order to generate targeted advertisements. While this is unlikely and has been denied by Facebook, it reveals growing distrust in the way that companies use personal data. In fact, it was found that 92% of customers do not understand how marketers use their information and that 55% believed that companies had not obtained their permission to send them marketing material.

And marketing is not the only area that is cause for concern for customers. In 2016, 46% of companies suffered data breaches that compromised the privacy of customers’ data and could potentially cause long-term damage to a company’s reputation. The Information Commissioner’s Office (ICO) found that only 1 in 5 customers trusted how companies stored their information. And likewise, Experian-DataIQ found that over 50% of customers do not like to share their data but that 22% are happy to if they trust the company.


Change in the law

In order to allow customers to gain more control over the destiny of their information, GDPR has been brought in. It aims to regulate the use of personal information within EU companies and the export of personal information out of the EU by forcing companies to clarify to customers how data is being used. Where, previously, the details of how customers’ data will be used has been hidden in lengthy terms and conditions, now companies will be forced to allow customers to selectively opt in or out of data uses using an easy to understand the document. Thus customers will need to give explicit permission before their details can be sold or passed on to third parties for instance.

A lot of marketers have argued that this is a bad thing. Around half of the marketers that were asked, thought that they couldn’t see a benefit for companies under this new legislation. And, with some research showing that the performance of individual ads declines when access to customer data is reduced, it could be that companies suffer a loss in revenue as a result.

But actually, GDPR could stand to benefit you as a business owner. One study found that when customers do not like the way that their information has been shared, i.e. to third parties, their purchasing interest drops. Yet when companies were clear about the methods that they used, even when generating targeted ads for users, there was an increase in click through rates and purchasing. Around 71% of customers also prefer personalised advertisements rather than generic.


What it means

What this shows us is that customers aren’t necessarily completely against advertising but perhaps are more against unsolicited surveillance. But if they have a clear opportunity to choose and can see a benefit, at least some customers welcome the use of their data.

This benefits you because rather than damaging your current marketing strategies, the changes you will need to implement in order to be compliant with GDPR could present an opportunity to build an honest, trusting relationship with your customer. How? Transparency.

GDPR aims to promote businesses to be clear with customers about how their data could be used so that they can make an informed decision about opting in or out. To truly use GDPR to use advantage, you should take this as an opportunity to not only show how data is being used but to ensure that the way you use their data is both beneficial to you and to the customer.

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