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Why Data Privacy is The Key to Building Consumer Trust in Marketing Maintaining customer data privacy is paramount for all digital marketers. Customers are vigilant about their data due to increasing data breaches, and any recklessness with customer information can be the first and final nail in your business's coffin.

By Vikas Agrawal

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Did you know that 422.14 million people were impacted by data compromises in 2022 in the US alone? With increasing instances of data breaches and unauthorized data use, it's no wonder that data privacy has become the top priority for customers. A Cisco report states that 76% of people say they would not buy from a company they do not trust with their data.

As a result, you must apply comprehensive data safety measures to retain your customers' trust in your company. This is especially crucial in marketing because customer data collection, storage and analysis drive modern marketing.

If you are wondering how you can take measures to safeguard customer data while marketing and bolster their trust in your company, you're at the right place! I've put together this guide to help you understand data privacy in marketing in simple terms. It will also help you devise cost-effective strategies to adhere to customer data regulations.

Related: 8 Ways a Data Breach Could Take Out Your Company Tomorrow

Understanding data privacy in marketing

Data privacy in marketing refers to protecting and responsibly handling consumer information collected throughout your marketing endeavors. Why is this crucial?

Marketers engage in a plethora of data collection and handling activities. This includes personal and behavioral data that help them gain insights into their target audience and provide personalized experiences. However, the threat of data privacy breaches is growing daily, and a breach can have severe 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 Getting Slammed By Cyberattacks and Student Data Is No Longer Safe. Here's How to Navigate Cybersecurity in the New, Digital Classroom

Ensuring customer data protection

First, you must ensure your website is secure, and consumer data is used for legitimate purposes. After all, the Harvard Business Review found that 84% of consumers avoid shopping from brands with suspicious websites. But there's more! Here are the critical methods you must apply carefully to safeguard your consumer's privacy and trust.

1. Compliance with data protection regulations

The most important step is to ensure compliance 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 acts are the primary customer data regulation frameworks, and if not followed, they lead to substantial fines and reputational damage.

CCPA, which was enacted in 2020, grants consumers the right to know about collected personal data and request the deletion of their information. It mandates the organizations to provide a list of third-party organizations that will have access to the data upon request from the customer. Enterprises failing to comply with the regulation can face statutory damages that range from $100 to $750 per consumer per incident.

GDPR was enacted in 2018. It grants individuals control over their data. Businesses that comply must obtain informed consent for data collection, provide privacy policies and notices and implement measures to protect the data. Noncompliance can result in a fine of €20 million or 4% of total revenue, whichever is higher.

By incorporating stringent measures as per these laws, you will fulfill the legal requirements and instill confidence in consumers regarding their information and strengthen the brand reputation.

2. Implementing Multi-factor Authentication (MFA)

Multi-factor authentication is an added layer of security for enhancing data security in marketing, and it is growing in use due to its effectiveness and ease of use. Under MFA, users must provide multiple forms of verification, such as a password or code sent to their phone number or email.

As a marketer, you can implement MFA across customer portals, employee access, and administrative dashboard. You can also go a step ahead and implement advanced methods such as biometric systems to strengthen security further.

With MFA, you can significantly decrease the risk of a data breach by allowing only authorized individuals access to sensitive customer data. This will naturally bolster consumer trust regarding your data handling practices.

Related: Safeguarding Your Corporate Environment from Social Engineering

3. Implementing Decentralized Finance

DeFi is an innovative technology that uses blockchain to create a decentralized ecosystem for secure financial data management. As per a recent survey report by Antier Solutions, about 15-20% of small businesses are already utilizing DeFi services for financing successfully. This indicates that Defi is living up to its promise of safety 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 risks. Moreover, DeFi uses smart contracts to ensure transparency between both entities. Smart contracts are self-executing contracts that automatically execute predefined conditions and are stored in blockchain. You can utilize smart contracts to obtain consent from consumers regarding data collection and usage.

In contrast to Defi, traditional centralized financing has data storage systems that pose inherent vulnerabilities to data breaches. So, vulnerability at even a single point can allow hackers to extract data.

4. Prioritize Supplier and Vendor Security

Marketers who collaborate with third-party suppliers and vendors may provide access to consumer data. If you are amongst them, it is necessary to conduct due diligence when selecting partners. Furthermore, your contracts with them should include provisions that require third parties to comply with the same data protection and privacy standards as you.

5. Establish Incident Response Plans

Despite all measures, there's always a risk of things going south as technologies develop rapidly! So, developing a comprehensive incident response plan is vital as it helps you effectively address and mitigate the impact of any data breaches or privacy issues. Here's what you must do to establish an effective incident response plan-

  • Start by establishing a cross-functional incident response team. This must comprise individuals from different departments, such as IT, communication, legal, etc., to bring together a range of expertise.
  • You must have an escalation plan ready to ensure incidents are promptly forwarded to the appropriate management level.
  • Develop clear communication protocols for both the internal stakeholders and external parties, such as the affected customers and regulatory authorities.
  • Designate official spokespersons for prompt and transparent communication because it helps maintain trust and demonstrates a commitment to addressing the incident responsibly.

Lastly, don't wait for emergencies! Conduct regular tabletop exercises and simulations to test the effectiveness of your plans and identify areas for improvement.

Summing up

Data privacy has become the most fundamental aspect of maintaining customer trust and building strong relationships in the era of data-driven digital marketing. Its importance cannot be overstated in a world where data breaches are rising in frequency and customers are increasingly sensitive about their data safety.

So, remember to analyze and implement the points in this guide carefully and always stay up-to-date with the latest privacy regulations, data security threats, and customer expectations. The area of data safety is constantly evolving, and only the most agile and vigilant marketers will find lasting success.

Vikas Agrawal

CEO of

Vikas Agrawal is a Strategic Marketing Consultant, and Crypto Advocate. With a passion for visual marketing and branding, data privacy and emerging technologies, Vikas leads and empowers companies to thrive in the digital era.

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