Using first-party data to elevate connected customer experiences

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Using first-party data to elevate connected customer experiences

by Arturo Mendiola

2/3/22

You’ve likely already heard about the changes in how the internet and internet of things (IoT) can collect and use consumer data. And with these changes, it’s imperative for your company to understand not only the regulations that exist, but also the limitations that are emerging from third-party tech updates. That’s why we at Horizontal believe that the future of delivering personalized, connected customer experiences lies in the ability of companies to deliver on their first-party data. 

But first, let’s back up. 

With consumer digital usage – from smartphones to online shopping to wearable technology – almost everything we do can be tracked. This includes things like where you are and where you go (geo-tracking), what you do online (internet activity to entertainment programming you stream), your health readings (heart rate and sleep patterns) and your biometrics (facial and voice recognition). Paired with any personal data you give when you buy a product or apply for a loan, the plethora of consumer data being collected, sold and shared with third parties has created a groundswell for more transparency and control of what data is being captured and how it’s being used. 

In fact, a survey of 2,000 U.S. adults conducted by KPMG reported the following
  • 86%of respondents said they feel a growing concern about data privacy

  • 78% expressed fears about the amount of data being collected

  • 40%of consumers surveyed don't trust companies to use their data ethically

  • 47%of respondents said they're concerned about the possibility of their data being hacked

  • 51%were worried about it being sold

These consumer concerns have led to the introduction of various laws and legislation being passed in recent years. From GDPR to CCPA, an increasing number of policies are being implemented to drive a higher level of compliance and accountability for companies to be more transparent — while also allowing consumers to have more control over tracking technology.  

The below chart provides an overview of what’s included in these regulations, and we foresee more regulations likely being passed over the next few years. This matters to you because even if you’re not headquartered in these countries or states, you still need to follow them if you have any consumers who reside in these locations. And as more local regulations get passed, the more you have to keep up with.  

GDPR Compliance - EU law and data protection ensures users have the right to

  • Be forgotten 
  • Data portability 
  • Data rectification 
  • Object to data processing 
  • Object to identity profiling

CCPA ensures consumers within California have the right to

  • Know about personal information a business collects about them, including how it is used and shared 
  • Delete personal information collected from them (with some exceptions) 
  • Opt-out of the sale of their personal information 
  • Non-discrimination for exercising their CCPA rights 

While regulations continue to be a major talk track, major tech companies are already taking their own initiative and making changes to align with consumer demand of data tracking. In 2023, Google Chrome will stop using cookies on their web browser. 

"Subject to our engagement with the United Kingdom’s Competition and Markets Authority (CMA) and in line with the commitments we have offered, Chrome could then phase out third-party (tracking) cookies over a three-month period, starting in mid-2023 and ending in late 2023."  – Google 

Similarly, as a part of Apple’s 14.5 iOS release, it launched a new privacy feature called App Tracking Transparency — effectively allowing users, when prompted, to opt-in or out of having apps track usage and activity.  

"If you say no to tracking, the app will no longer be able to use Apple’s IDFA identifier to share data about your activity with data brokers and other third parties for ad-targeting purposes. It also means the app can no longer use other identifiers (like hashed email addresses) to track you, although it may be more challenging for Apple to actually enforce that part of the policy."  – Tech Crunch 

All this to say, as much as the advancement of technology has improved consumers’ lives for the better, we’re all still human…and as humans we sometimes have trust issues. In this case, the trust issues lie within how technology is being used underneath the surface of digital habits and behaviors in our daily lives.  

Justifiably so, recent news stories have illustrated how bad things can go when customer data is breeched. More notably was a major data breach of T-Mobile in 2021 – where more than 50 million people had personal data like social security numbers, driver’s license information and device IDs hacked. Obviously, this is a huge identity fraud concern if you were one of those T-Mobile customers.  

So how do brands and companies expertly balance everything between keeping data secure, using that data in ways to enrich the brand experience for their customers — while also facing the impending sunset of big data & third-party cookie tracking? 

The first thing is remembering that there are real people behind the numbers. As a digital practitioner, put yourself in your customer’s shoes. Think about how you’d want your information to be kept private — but when given permission, used in ways to make the customer experience more personal and fulfilling. It’s imperative that your organization think about how to humanize data. This is where you lay the foundation of trust with your customers.  

With this foundation of trust, along with showing how you’ll elevate the experience a customer has while using their data, customers will be more apt to share it with you (in an equal exchange of value). So, collecting more first-party data – data that you collect directly from customers and thereby own – will be a much bigger priority for brands. These are things like identity data (name, email), transactional data (purchase history, loyalty status) and user-defined data (content and communication preferences). 

And it’s not hard to get started. At Horizontal, our No Code Preference Center is a solution for enterprise companies to quickly spin-up and capture customer communication preferences while staying compliant with all the regulations. We also strongly advise our enterprise clients to lean on customer data platforms (CDP) to activate a connected experience. CDPs have emerged as a means to holistically capture and aggregate customer data from multiple disparate sources — essentially unifying customer data that then allow you to activate personalized interactions. 

With a customer-centric, data-focused sensibility, you can build company strategies around realizing connected customer experiences – one that uses rich data points to inform each touchpoint and moment of engagement through their journey.  

Learn more about how your organization can activate 360-degree customer data through our Humanizing Customer Data series. Download our free whitepaper (the first of our three-part series) on this topic – Get to know your customers. Again.  

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