How to balance privacy and personalisation [SAS FORUM]

This blog is about one of today's most challenging paradoxes in business: how to balance data privacy and personalised offers.

By Raf Verhoogen, Business Development Manager - Business Solutions at SAS

This blog is part of a tailor-made content series centred around the SAS Forum Belux 2015. It is linked with the event track called `Digital Society’. Click here to join the event and learn more about the other 3 tracks (Internet of Things, Data Science and Data Management).

One of today’s most challenging paradoxes in business is how customers expect personalised and relevant offers while, at the same time, being quite concerned about their data privacy. The numbers from Gigya’s recent `2015 State of Consumer Privacy & Personalization’ report are quite striking: a staggering 96% of American and 91% of UK consumers are concerned about their data privacy. Yet, simultaneously, UK and US consumers alike are frustrated when they receive non-relevant messages, which cause them, among other things, to unsubscribe from e-mails (65% US and 57% UK) or ignore future communications from the company (47% US and 44% UK)1.

This poses a big dilemma for organisations, seemingly provoking a Catch-22 situation. The answer, however, lies in a perspective shift: from thinking of data privacy merely from a compliance and ethics point of view to actually leveraging it as a commercial differentiator. Basically, there are two important bridges to cross in order to balance personalization and privacy in such a way that they become a competitive advantage. It’s all about trust and usefulness.

Trust is a must

A recent SAS powered research paper uncovered – that, above all else – data security is what influences customers’ willingness to provide information about themselves to companies. No less than 63% would be more inclined to allow access to their data if they knew that they will be in safe hands2. This shows how essential it is for companies to invest in cyber security and anti-fraud software. Only then will they keep data breaches from tainting their reputation and will they preserve their customers’ trust. How cyber security today goes far beyond basic anti-malware and anti-virus software is brilliantly described by my colleague, Andy Scherpenberg, in his recent blog “why fighting fraud without analytics is no longer an option”.

Another important way to earn that trust is to be transparent, of course, and be open about what you are doing with your customers’ data. Most companies still have a long way to go in this area since only 32% of consumers feel that businesses are open and transparent about their policies on using personal data.

Be more than relevant. Be useful.

The second key influencer is the much more pragmatic “give to get” factor. Customers are willing to give information if they get something in return, like discounts. Now, of course, sales promotions are only interesting if they are for a product that is wanted, or even better: one that is needed. There is a very clear gap between something that adds value and something that is ‘merely’ pertinent. Now that customers are more and more critical, marketing has no other choice but to become as useful as a service.

An example would be a pharmaceutical company that receives permission to monitor the glucose levels of its customers – hence, being able to leverage a gold mine of data from a research point of view – so that the organisation can return the favour by notifying the diabetic when something is out of balance.

Another great example are the SOS buttons that are increasingly integrated into cars. This kind of connected car sensor obviously has the potential to gather very granular data about the driver: how many kilometres (s)he travels and when, where (s)he goes, how fast, etc. And yet, this information is well worth giving up if the driver has become completely immobilized in an accident in the middle of the night and the car brand’s emergency call centre knows exactly what happened and where, notifies the ambulance service and the police and keeps talking to the driver until help arrives.

This approach goes light-years beyond just being ‘relevant’ with data. Most companies still have a long way to go before they will be able to know their customer so well as these two examples. But this is definitely the way in which data personalisation is moving, so trying to close the gap with a clear yet realistic digital roadmap is an absolute must.

In short, the answers to the privacy versus personalisation challenge lie, for a very significant part, in analytics: advanced analytics to fight the ever more complex fraud environment in order to ensure trust of customers and (near) real-time analytics to move your marketing beyond just ‘interesting’ offers to actual, useful services.





Join SAS Forum Belux on October 15 next in Antwerp to gather other valuable insights about the digital society, the Internet of Things, data science and data management: