Big Data

EU data rules change the marketer-consumer deal

And it’s not all bad news

Recently, the way businesses are allowed to collect and use consumers’ personal digital data changed forever. Marketers now must treat consumers as equal partners in a data relationship, rather than targets to be conquered.

dataprivacyThe European Parliament approved a draft data protection legislation for its member countries that will force companies to change their practices regarding consent to collect personal data, consumer profiling, the right to delete personal data, and the expediency of notifications about data security breaches. Similar legislation is under review in the U.S.

While the UK Direct Marketing Association said that this less business-friendly version of the proposed regulation is by no means a done-deal, the EU Parliament’s vote should be ringing alarm bells in the boardroom of every business that leverages personal digital data.

It means that every company using a CRM system or any sort of customer list will need to adapt to the proposed changes, which are much larger than the industry had expected. Breaches involve penalties up to 5 percent of a company’s global revenues.

It also means third-party data has been rendered redundant, and processing of it illegal. So data brokers will need to establish a consumer face, working constructively and openly with consumers on their personal data.

As with any change in the dynamics of a relationship, those who once had the position of power will have to work harder than ever before to communicate with their hitherto subjects.

There are two ways that marketers can look at this new dynamic:

  • The pessimists will focus on their seemingly diminished power and rue the “extra” work that they now are forced to put in. These marketers will see their relationships with their customers fall apart.
  • The optimists will envision a new type of marketing that empowers consumers to help businesses more efficiently serve them. This is the emerging wave of consumer-powered marketing solutions that provide a new covenant between marketers and consumers by empowering them to review, edit, delete and enhance their data.

Recent precedents side with the optimists. The largest data broker in the world found that, after offering consumers the option to opt-out of data collection and targeting through its consumer data portal, fewer than 1.5 percent chose to opt-out. 

In fact, empowering consumers to drive their own data can in turn drive the efficiency and accuracy of an organization’s CRM operations, as well as drive response rates to personalized content through more accurate personalization.

Consumers are ready, willing and able to put in the extra work to make this new relationship dynamic work. But only if marketers are willing to let go and show the ultimate act of love to their consumers… by setting them free.