Data Privacy – the Critical Factor of Success: The General Data Protection Regulation (GDPR) as a Chance for Companies
Published on 8 December 2017 | Author Stefan von Lieven0
Product and brand preferences, interests, attitudes, opinions, social contacts, sociodemographic aspects, locations and movement patterns – companies know more about their customers than ever before, or at least they have the technical possibilities to find out. Deliberately or unaware, consumers leave a multitude of data on every digital touchpoint they cross. These information can be used by companies for their business models and marketing activities. Basically, consumers are willing to provide their personal data, as long as they get a real added value in return. And yet, as companies’ possibilities to collect and process data increase, the consumers’ sensibility about data protection and security grows steeply as well. A general mistrust against commercially processed data as well as worries about data abuse accompany this trend. Consumers draw clear lines from which on they do not find commercial data analysis helpful and innovative anymore, but mysterious, intrusive, and dubious. According to a recent study by Kantar TNS 56 per cent of consumers in Germany are concerned about the usage of data by companies. Many get the feeling the data is not used to their advantage and demand more rights to decide what the data is being used for.
The Kantar TNS study reveals that 56 per cent of the consumers reject smart devices which observe their activities. A recent KPMG report shows similar results. Worldwide, 55 per cent of the interviewed people have already at least once decided not to buy a product because of concerns regarding privacy. Furthermore, 75 per cent find a resale of their data unpleasant. More than two thirds feel uneasy because of apps on tablets or smartphones using personalized data. Hence, only half of the interviewed would trade “less” privacy for cheaper products.
Data Privacy as Chance and USP
What does all this mean for companies? Enterprises benefit from knowing their customers and not overstepping boundaries drawn by them. What might sound restrictive in the first moment, can be a real chance. If consumers find privacy and security business-critical, it does also reveal that companies having a high reputation in these fields can benefit. Implementing and transparently communicating high standards, and offering a real benefit to the customers for handing over (only) data which is objectively needed can strengthen the company-customer relation and are thus a huge competitive advantage for companies, especially compared to international competitors coming from countries (in the past) known for lower standards for data protection.
As a result, we should understand the General Data Protection Regulation as a real chance. The GDPR ends the rule of many from each other differing laws and for the first time a Europe-wide set of rules for collection and processing data is being implemented. The impacts on the companies depend individually on which business model is used. However, many German companies should have a lead to others as the German laws already comply with the General Data Protection Regulation in large parts. Particularly US companies which offer their services within the EU have a huge backlog, as they are affected by the new rules just as European businesses.