GDPR and Radical Transparency - How are they connected?
With the introduction of recent GDPR legislation, customers now have more control than ever over their own data. The biggest change is the emphasis on consent -- companies will need to make sure that customers sign off on how their personal data is being used.
But you might be thinking, “how does this really affect me?”
For brands, GDPR means that they must be open about their data collection practices and its implications for customers. All the while, they must present their data collection methods in a clear way.
"If you have a page of different consent, and saying by clicking here you consent to lots of things, that will be wrong. You need to be able to apply that consent individually," Harry Small said, a partner at law firm Baker & McKenzie.
From the customer perspective, they will exercise greater control over the data that companies have about them. They can access this data to see where it’s being used and for what purpose.
But more than anything, the new GDPR policies are initiating a two-way shift to a culture of radical transparency.
Radical transparency is a mutually beneficial relationship between customers and brands. In a radically transparent world, brands are an open book -- which data they are collecting, how it is being used or shared, and why they collect this data. In return, customers are more likely to provide sensitive data such as their name, email address, phone number, and date of birth.
Although some companies feel uncomfortable sharing their true results, especially if they are underperforming, straightforwardness with their customers means that they will never have to over-promise or underdeliver. The ineffective back and forth about expectations can be eliminated and the time can be spent continuing to improve the product.
A 2015 study called “What is the Future of Data Sharing?” featuring over 8,000 people from different countries and generations revealed that 75% of people are more willing to share various types of personal data with a brand they trust. Customers also said they were more willing to share when they know the brand will help them understand and control how their data is being used. When customers are able to actually see how they are gaining value by sharing their information, it incentives them.
However, throughout the digital marketing age, many consumers have been hesitant to provide their data to businesses because they are concerned about how it will be handled. This concern stems from a lack of information and honesty from brands, resulting in the fact that almost 60% of people have done things to limit companies from tracking them. To go even further, over a third of people have made up information to avoid giving data.
To foster an environment of transparency, brands need to take a few steps to ensure that they are maintaining a relationship of trust:
Protect the data -- the confidence level customers have in a company’s ability to protect their data determines how much trust they have in the brand. It’s important to develop proper data-security systems and privacy statements, and make sure your customers know about them.
Provide value-added benefits- 75% of people are happy to give out their personal data if it is exchanged for a product or service they care about. Additionally, 80% of people said they were willing to release their personal data if they were incentivized by a reward system.
Proactively help customers understand and control how their data is being used. For example, Netflix has a system that takes what they are watching and other data points about customer preferences so they can formulate a database of recommended shows for them.