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Webinar Recap: Unpacking the Privacy versus Personalization Paradox

In a recent webinar, guest speaker Fatemeh Khatibloo, Principal Analyst for Forrester, and Rashmi Vittal, Head of Marketing for SAP Customer Data Cloud from Gigya, explored how businesses can simultaneously protect consumer data privacy while delivering personalized digital experiences. By the end of the discussion, these two experts had not only unpacked the topic, but had also showed attendees the path to more customer trust and brand advocacy.

A New Paradox that Demands a New Paradigm

The privacy-personalization balancing act is a challenge for enterprises around the globe because the two business practices are often viewed as opposite ends of a spectrum. Fatemeh put it best when she said:

“What we have here fundamentally is a privacy-personalization paradox. People want their data to be used for recognition, for personalization and for relevant content and media, but they also want their data protected – and here’s the important part – they want it used fairly and ethically.”

Consumers will offer personal data to brands if they know how its used and if they have control over its use.

Diving deeper into the analysis, Fatemeh and Rashmi showed that businesses don’t have to make an either/or decision when it comes to privacy and personalization. In fact, the two have a common goal: building customer trust.

Trust as the Fulcrum

When done right, personalization builds trust by making consumer choices easier. After all, consumers face constant choices, especially in the digital landscape. Some are big and some are small, but all choices have an effect on the consumer.

“They’re worried they’re getting left behind. They’re worried about if they’re making the right decisions or not,” Fatemeh said. “[Making choice] is cognitively burdensome. So I submit that we should be thinking about how people make choices when we try to do better personalization.”

This makes sense at the practical level. Personalizing emails makes the consumer’s choice to read it easier. Recommendation engines make the consumer’s shopping choices easier. The list can, and does, go on.

But the “when done right” caveat mentioned above is vital, and that’s where privacy comes in. If personalization goes too far, if consumers discover their data has been collected or used without their knowledge or permission, trust is broken. And, as Rashmi pointed out, this is bad news for businesses.

“The number one reason why consumers banish brands is because trust has been broken.”

Rashmi showed how a business’ consumer data privacy strategy sets the guardrails for personalization. The right strategy makes the collection and processing of data more transparent while offering customers the ability to shape their relationships with brands and digital properties by giving them control of their personal data. By leveraging these guardrails, the business will build more trusted and loyal customer relationships while addressing consumer privacy and data protection regulations, including the General Data Protection Regulation.

Trusted customer relationships are built by respecting consumers' privacy, offering transparency and control of data, and delivering a personalized omni-channel experience based on permission-based, first-party data.

How Privacy and Personalization Come Together

To maintain and build trust, instead of breaking it, businesses need a customer data management strategy built on unified customer profiles, Rashmi said. The profiles become the single source of customer data for the entire enterprise and can help overcome major challenges to both privacy and personalization, such as:

  • Fragmented customer data
  • Orchestration and governance issues
  • Limited customer insights

Why is building trust so important for businesses? It has a direct effect on the bottom line.

“When you think of trusted personalization, it really fundamentally starts with delivering value-for-information exchanges. And when you deliver that value, in return you’re going to get the information, … to improve loyalty, and create brand advocates.”

Listen to the Whole Conversation

Beyond what I covered here, Rashmi and Fatemeh discussed a range of topics, including:

  • How to create a culture of privacy, and
  • How bad privacy practices put innovation at risk.
  • Key case studies to help illustrate the need for a balanced privacy-personalization approach

Watch or listen to the entire conversation.

By Ratul Shah

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Gigya has updated its Privacy Policy as Gigya, Inc. has been acquired by SAP America, Inc. and Gigya has updated the information regarding how we collect and use your Personal Data. You can see the updated Privacy Policy here.