Data Privacy is a Fickle Beast

January 28, 2019

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The bargain most of us agree to when we decide to use almost any online service is one of the internet’s oldest. The promise of “free” services that help us connect with friends, curate our music library or navigate a traffic jam has generally been a pretty easy exchange for most of us. Though these bargains may not cost money in many cases, it does cost customers the data they offer those services. That bargain has been uncomfortable at times and there are more examples than some would like to admit of companies who have abused the spirit if not the letter of that agreement. But there has been a bit of a shift of late that not only sharpened public views on the responsibilities brands have to keep data secure and private, but also what they believe it means to keep data safe and private particularly on a day like today – Data Privacy Day.

The global regulatory framework is undergoing a bit sea-change in response to this undercurrent consumer discontent with the way organizations have handled consumer data security and privacy through the advent of new regulations like GDPR or the California Consumer Privacy Act. The reputational risk, however, is much harder to control or predict as it’s almost entirely based on customer perception and expectations that can literally change by the day.

There has always been a healthy undercurrent of skepticism held by customers regarding the ability or inclination of companies to secure and keep customer data private, but recently we’ve seen a bit of a paradigm shift that has broadened and sharpened that baseline skepticism. Though the prevailing winds of customer perception have been blowing towards greater skepticism for a while, once the Cambridge Analytica news hit, customer sentiment has sharpened and organizations across the spectrum have looked for answers about what “right looks like” ever since. What’s more, our Authenticity Gap research found that 81% of engaged consumers in the U.S. and 80% in the U.K. felt it important for companies to take a stand as it relates to data security and privacy so it’s very clear not only that this is an issue isn’t going away, but also that how your company treats this issue is extremely important to your customers.

In this new environment, organizations across the spectrum are looking for answers and they’re doing so for good reasons – this is new territory. Because reputational risk related to data privacy, by nature, isn’t static because it’s almost entirely based on perception as opposed to what laws or regulations compel. That perception is increasingly tied to expectations that have evolved beyond mashing buttons to get through a user agreement and are expecting organizations to be more transparent and proactive in the way they engage with customers about their data, it’s hard to know precisely where to stake your company’s reputation right now.

So what should companies do about this?

In short, because this depends on a variety of factors from the data your company stores to its general approach to external or stakeholder relations, that will need to be a values-based decision made at the very top of any organization. For some, it might simply mean getting a comprehensive sense of the customer data you own or manage so you can adequately prepare for any potential issues that might emerge. Other companies may find the right answer is to be more proactive, clear and flexible in the way they engage with their customers about the data they gather and how customers allow it to be used.

The brutal truth is that no company should assume they will be able to handle customer data on into the future the same way they have in the past. That fundamental bargain companies have entered with their customers about the data they own or use in the past doesn’t necessarily stand today. It’s a different world out there filled with customers who have different fears and expectations of the companies they choose to do business with. New dynamics can also present opportunities for leadership. With customers more focused on security and privacy, companies leading the way and figuring out how they can give customers greater control of their data will benefit. Drawing firm lines around issues relating to data privacy are a good start. Actually demonstrating the security and privacy of customer data is a priority will take you that much further with customers who are clearly more concerned and engaged.