Provocateur:

A law recently rolled out in Maine requires Internet service providers to obtain consumers’ opt-in before their data can be used for ad targeting—a major win for consumers who have demanded greater data privacy. In light of this new law, other states should also move to protect consumers by ensuring that companies are safeguarding their customers’ personal data and offering them control over what data is shared.

Although many companies collect customer data as a regular practice for creating targeted ads, many don’t take a transparent approach when dealing with that data. Customers should always have the option to opt in to their data being collected, and they should also always be fully aware of how and where this data is being used.

According to a Salesforce research brief, only 55 percent of customers say they understand how companies use their data. This shows that there is a massive disconnect between brands and their customers, one that needs to be closed to bolster customer trust.

One way that customer trust develops is when companies are transparent about what data they collect and how they use that data used once a customer opts in. This trust often leads to deeper customer loyalty, greater customer advocacy, and an increase in spending and purchases.

If companies are being truthful and only using customer data to bolster their experience and provide value, then they shouldn’t worry about whether customers will choose to opt in. In fact, 78 percent of customers expressed that they’re more likely to trust a company with their data if the company uses it to customize their customer experience. Drill down to only millennials and Gen Z and this number jumps to 86 percent, meaning that the youngest and most digitally savvy group of customers are even more likely to willingly share their data to receive a better and more personalized experience.

Once companies establish a standard and transparent opt-in process, and clearly state what data is being collected and why, they must also make sure opting out is just as easy. They must provide customers the option to opt out of sharing their data at any time, for any reason. Customers shouldn’t have to jump through any hoops or convoluted processes to get there.

Along with a loss of customer trust, there are several pitfalls companies will encounter by not being transparent in their opt-in process. If a company can’t articulate exactly what a customer stands to gain by giving them the right to collect personal data, then customers will likely feel that their data isn’t being used for a good reason—which translates to a poor customer experience in the customer’s mind.

Being targeted for ads alone is also not a real benefit. There must be an actual improvement to the customer experience, whether it’s selected personalized offers based on the customer choosing or access to new features or services for free.

Personal data should always fuel an improved customer experience. Companies that focus on this will see an increase in their customers’ willingness to opt in. When customers don’t see the real benefit from sharing their data, they’ll quickly opt-out and lose trust in the company.

Offering a transparent opt-in process is the only way companies should deal with their customers’ data. It shouldn’t be a question of if customers are given the opt-in option; it should be an automatic best practice.

Maine is on the right path with its new law; states across the country should emulate it. After all, when customers win, the companies they buy from do, too—with great customer trust and loyalty, as well as increase purchases and spending.

About the Author

Ever since his appointment as Luminati CEO, Or Lenchner, has continued to expand its market base as a data collection operator dedicated to maintaining the openness, transparency, and integrity of the online ecosystem.

Joining Luminati as head of product development, Lenchner’s career and evolvement at the company has been driven by his firm belief in a transparent, ethical by design web-environment benefiting both, enterprises/businesses and consumers. Prior to his career at Luminati, Lenchner founded and managed several web-based businesses.