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Did you know 422.14 million people were data compromises hit in the US alone in 2022? With data breaches and unauthorized data usage on the rise, it’s no wonder that data privacy has become the top priority for customers. a Cisco report states that 76% of people say they wouldn’t buy their data from a company they don’t trust.
As a result, you must apply extensive data security measures to maintain your customers’ trust in your company. This is especially critical in marketing, as the collection, storage, and analysis of customer data drives modern marketing.
If you’re wondering how to take steps to protect customer data during marketing and strengthen their trust in your company, you’ve come to the right place! I’ve put together this guide to help you understand data privacy in marketing in simple terms. It also helps you devise cost-effective strategies to comply with customer data regulations.
Related: 8 ways a data breach could take out your business tomorrow
Understanding data privacy in marketing
Data privacy in marketing refers to protecting and responsibly handling consumer information collected during your marketing efforts. Why is this crucial?
Marketers engage in a plethora of data collection and processing activities. This includes personal and behavioral data that helps them understand their audience and deliver personalized experiences. However, the threat of data privacy breaches is increasing day by day and a breach can have serious consequences.
These include reputational damage, legal repercussions, financial loss and loss of customer trust. So every marketer must prioritize customer data security and comply with privacy regulations. Let’s understand how this works.
Related: Schools are hit by cyberattacks and student data is no longer safe. Here’s how to navigate cybersecurity in the new digital classroom
Ensuring protection of customer data
First, you need to ensure that your website is secure and consumer data is being used for legitimate purposes. After all, the Harvard Business Review found that 84% of consumers don’t shop from brands with suspicious websites. But there’s more! Here are the critical methods you must carefully adopt to protect your consumer’s privacy and trust.
1. Compliance with data protection regulations
The most important step is to comply with data protection regulations, such as the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) in the United States. These two laws are the primary regulatory frameworks for customer data and failure to comply will result in significant fines and reputational damage.
The CCPA, which went into effect in 2020, gives consumers the right to be aware of personal information collected and to request deletion of their information. It authorizes the organizations to provide a list of third party organizations that will have access to the data at the request of the customer. Companies that do not comply with the regulation can receive legal damages ranging from $100 to $750 per consumer per incident.
GDPR came into force in 2018. It gives individuals control over their data. Compliant companies must obtain informed consent for data collection, provide privacy policies and notices, and implement measures to protect the data. Non-compliance may result in a fine of €20 million or 4% of total sales, whichever is higher.
By taking strict measures under these laws, you will comply with legal requirements and instill confidence in consumers regarding their information and strengthen brand reputation.
2. Implement multi-factor authentication (MFA).
Multi-factor authentication is an additional layer of security for improving data security in marketing, and is increasingly used due to its effectiveness and ease of use. MFA requires users to provide multiple forms of authentication, such as a password or code sent to their phone number or email address.
As a marketer, you can implement MFA in customer portals, employee access, and the administrative dashboard. You can also go a step ahead and implement advanced methods such as biometric systems to further bolster security.
With MFA, you can significantly reduce the risk of a data breach by allowing only authorized individuals access to sensitive customer data. This will of course build consumer confidence in your data handling practices.
Related: Protecting your business environment from social engineering
3. Decentralized finance implementation
DeFi is an innovative technology that uses blockchain to create a decentralized ecosystem for secure financial data management. According to a recent research report by Antier Solutions, about 15-20% of small businesses are already using DeFi services for successful financing. This indicates that Defi delivers on its promise of security and reliability. But what makes it so effective, you may ask?
DeFi platforms use ledger technology and cryptography to decentralize data storage and eliminate potential risk. In addition, DeFi uses smart contracts to ensure transparency between both entities. Smart contracts are self-executing contracts that automatically execute predefined terms and conditions and are stored in blockchain. You can use smart contracts to get consumer consent regarding the collection and use of data.
Unlike Defi, traditional centralized finance has data storage systems that are inherently vulnerable to data breaches. So vulnerability at even one point can allow hackers to extract data.
4. Prioritize supplier and supplier security
Marketers who work with third-party vendors and vendors may provide access to consumer data. If you are one of them, it is necessary to exercise due diligence when selecting partners. In addition, your contracts with them must contain provisions that require third parties to adhere to the same data protection and privacy standards as you.
5. Draw up incident response plans
Despite all measures, there is always a risk of things going wrong, as technologies are developing rapidly! Thus, developing a comprehensive incident response plan is vital as it helps you effectively address and mitigate the impact of data breaches or privacy concerns. Here’s what you need to do to create an effective incident response plan:
- Start by building a cross-functional incident response team. This should include individuals from different departments such as IT, communications, legal, etc., to bring together a range of expertise.
- You must have an escalation plan ready to ensure that incidents are quickly forwarded to the appropriate level of management.
- Develop clear communication protocols for both internal stakeholders and external parties, such as affected customers and regulatory authorities.
- Designate official spokespersons for prompt and transparent communication, as this helps to maintain trust and demonstrate commitment to responsibly handling the incident.
Finally, don’t wait for emergencies! Perform regular table exercises and simulations to test the effectiveness of your plans and identify areas for improvement.
Data privacy has become the most fundamental aspect of maintaining customer trust and building strong relationships in the age of data-driven digital marketing. Its importance cannot be overemphasized in a world where data breaches are on the rise and customers are becoming increasingly sensitive to the security of their data.
So remember to carefully analyze and implement the points in this guide and always stay up to date with the latest privacy regulations, data security threats and customer expectations. The field of data security is constantly evolving, and only the most agile and vigilant of marketers will find lasting success.