How The General Data Privacy Regulation Will Impact Your Customer Experience


New regulations from the EU are impacting customer data around the world and causing companies to make big changes or risk getting hit with heavy fines. But instead of fearing the change and just throwing money at the problem, complying with the regulations can be thought of as an opportunity to rethink and improve the customer experience.

The General Data Privacy Regulation (GDPR) is creating a buzz that Jeff Nicholson, VP CRM Product Marketing at Pegasystems, likens to the anticipation surrounding Y2K. Essentially, the new regulation requires any company anywhere in the world that uses EU residents’ personal data to re-think their data strategy. That means that companies in the US are still affected if they have ever done anything like collect email addresses or names of people who live in the EU. If companies don’t comply with the regulations, they could be fined up to 4% of their total global revenue. Under GDPR, individual customers can approach companies to find out what personal data they have, and organizations have to provide the data to the customer. Essentially, the new rules change who owns personal data—instead of companies, the power is now in the hands of customers.

The new rules come at a time when data breaches are found every day and affect millions of people a year. People around the world are more aware of their personal data and want to find ways to protect it and know who has access to it. Companies must take safeguarding their customers’ data very seriously. If customers don’t feel their information is being protected, they will take their business elsewhere, which can lead to huge PR and financial consequences for companies.

A recent survey found that more than 90% of multinational companies consider GDPR to be a top priority, and many are allocating significant budget to solve data problems and come into compliance. The majority of large companies say they plan to spend at least a million dollars on their new data strategy.

If the money is being spent anyway, smart companies will put it to good use and do more than just put their data practices in compliance with GDPR—they will use it as an opportunity to transform customer experience and become a leader in their fields. This is a great chance for companies to combine compliance with marketing. Instead of simply just plugging a hole in the data stream, think of how you collect data and how it can be better used and targeted. Now that customers have more control over what companies have their information, irrelevant communication from companies puts those brands at risk of losing the customer. All it takes is one bad communication for the customer to opt out and have their data removed.

The best companies not only respect and safeguard customer information but also use it to create open lines of communication that really help the customer. With all the data available, companies have the potential to create targeted outreach that meets the needs of every individual customer. This can be done a number of ways, but Jeff recommends getting people from across the company, especially from compliance and marketing, involved. Investing in the right technology to monitor, track, and safeguard customer data is also incredibly important. Being transparent with the customer information you have can also build a better relationship with customers. Many people are wary about who has their personal data, and they will likely be more trusting of companies that can show where they gathered the data, what they are using it for, and who has access to it. Data plays a huge role in customer experience, and being able to monitor and target it better can lead to better relationships between companies and customers.

GDPR is changing how companies handle customer data, but it is much more than just a compliance issue. In order to lead the new data conversation, companies should use the opportunity to re-think their customer experience and find new, relevant ways to reach out to customers.

Blake Morgan is a customer experience futurist, keynote speaker and author of the book More Is More. Sign up for her customer experience newsletter here.

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