June 1st, 2018

GDPR: Don’t Let a Good Data Crisis Go to Waste

For many data-led brands, the GDPR maelstrom bears all the marks of a full-fledged crisis. Some of the most valuable sources of customer data have vanished overnight, while whole data architectures need to be reworked to account for new policies. When the dust settles, brands will be left searching in the dark for customer insights that, as recently as April, were in full view.

But scratch the surface below all the data upheaval, and it becomes clear that many brands’ data practices were built on less-than-solid foundations to begin with. For them, the GDPR shakeup can serve as a welcome reset to their data programs — giving them the excuse, and the push, to completely rethink their data governance, strategy and architecture.

To understand where brands could use the help of GDPR, it’s useful to begin with a discussion of how marketers were already struggling with data before GDPR came along.

Drowning in the Data Drought

Many marketers’ biggest data challenges come down to data-quantity issues. Brands must make due with too little data, or drown under the confusion of too much (often at the same time).

Much of the “too little data” problem is specifically a challenge of being cut off from data that, under different conditions, the marketers themselves would own. A prime example of this is the challenge presented by “walled gardens” like Google and Facebook – which, though crucial marketing platforms, keep much of the customers’ data for themselves.

Another example is the ever-expanding array of online third-party sales channels — from travel aggregators to Amazon — that, like the walled gardens, pass little customer data back to the brands. Meanwhile, one of the GDPR’s biggest blows to brands will come from yet another data shortage: Google’s decision to no longer provide individual-level data via DoubleClick Campaign Manager. Whole data-based marketing programs will lose a primary source of insight.

But while marketers struggle to get the data they need to run their data-based marketing operations, they simultaneously struggle to make sense of all the data they have. The wealth of information from an ongoing flood of digital and offline channels leaves marketers scrambling to create a coherent picture — for instance, tying disconnected data together from their call center, email, direct mail, and digital and physical sales into cohesive customer journeys.

To solve this problem, savvy brands have turned to people-based marketing — marketing that manages data based on the person first, rather than managing data from disparate touch points and then piecing together disconnected pieces of a puzzle. This approach is greatly helped by replacing legacy data warehouses — which can trap data into overly neat buckets — with the far more dynamic data lakes that house data with a fluidity that reflects the ways real users juggle an endless array of channels.

But people-based marketing can bring about its own set of data overload problems. For one, marketers focus on capturing data about all customers, from every possible route — with little regard to which customers are lower- or higher-hanging fruit, and what types of marketing their customers most want to receive. Often, the data lake itself can exacerbate these problems. Its open-ended categorization makes it dramatically easier for brands to collect and store any and every shred of incremental data, and to execute off of it — even if using a given piece of data isn’t the most strategic path. The net result is that brands end up engaging less-interested customers as if they were brand enthusiasts. In addition, they reach customers in ways they don’t want to be reached, or won’t excite them about the brand.

To sum up: marketers are limited by the information they can’t get, are overwhelmed by the data they have already, and may not be using data effectively to engage customers in the best possible way. All three of these entrenched problems call for a radically new approach to data strategy and architecture. But where will brands get the resources, and the freedom to shake things up radically?

Enter GDPR.

GDPR to the Rescue

General Data Protection Regulation is effectively a government mandate for brands to rethink every aspect of their data practice. The legislated role of a Data Protection Officer will necessarily cause brands to think through their strategy for how they handle data across the company, including between siloed channels.

The need for “legitimate interest” or robust consent to collect data means that brands must have a clearly defined data strategy in mind governing every item of data they collect. Meanwhile, customers’ new rights to manage their own data will force brands to revisit how they store, catalog and retain all the data they have. None of these forced efforts have been — or will continue to be — simple or cheap. But they unquestionably give data-obsessed brands a much-needed chance for a complete data do-over.

GDPR also gives brands the opportunity to use data not just as a way to intercept customers at every turn — but instead, as a path toward engaging every customer in the best possible way. By letting customers take charge of the conversation with data opt-ins, GDPR gives marketers an instant identifier of which shoppers are brand enthusiasts already, plus which data those brands can likely get the most mileage out of. And by letting customers declare which types of data it’s OK to use, brands can zero-in on the data approaches that will truly engage their customers — and to quickly discard the least-effective data and approaches.

All of this is a far cry from a focus on data for data’s sake. Suddenly, brands are given a new opportunity to focus their data efforts on the right data points, the right shoppers, and the most effective data strategies — and almost nothing else.

Meanwhile, as consumers exercise their GDPR rights to remove, inspect and change the data that brands use to follow them, they’re also directly engaging those brands. This opens entirely new opportunities for conversations with customers — for instance, by introducing a brand perception survey or even offers within the data-change portal itself. (If you’ve ever unsubscribed from an email list, but then signed up for more e-mails after being presented with a menu of other lists at the unsubscribe page, you’ve seen a similar approach in action.)

In other words, GDPR lets brands and customers work together to re-evaluate how to use data — and to foster more meaningful interactions as a result.

In short, the discipline GDPR imposes can force marketers to make the most of the data they have to engage customers far more effectively. This can create mutually beneficial, symbiotic relationships between brands and customers — with data as the connection between the two sides. Or, put into today’s marketing terms, GDPR can pave the way for true people-based, customer-centric marketing.

But for brands to achieve that potential, they’ll need to seize the moment — and put their data programs in order.

The Identity Trade-Off

To be clear, GDPR will not be an unmitigated boon for marketers. Far from it. Unquestionably, GDPR will mean less data for marketers to work with — an information gap that will stymie customer acquisition efforts in particular. Throughout the EU, it will be vastly more complicated to collect data on a new customer or prospect and use that information for further marketing.

But at the same time, new advances in customer identity — the science of creating a complete picture of a single user out of the many far-flung online and offline data points — makes this customer engagement/customer acquisition tradeoff a more meaningful one. A better grasp of customer identity, and the holistic, 360-degree customer engagement it enables, means that deeper engagement with customers can potentially yield more results than ever before. And so if GDPR makes it harder to acquire new customers while also helping them forge better connections with existing ones, the trade-off might well be worth it.

None of this is meant to minimize the real challenges that GDPR poses for brands working in the EU today, the challenges brands will face as privacy laws expand worldwide, or the challenges involved in implementing the new approaches I’m suggesting above. But as GDPR forces brands to rethink governance, strategy and the architecture behind their data warehouses and data lakes, now is the chance to rebuild brand data programs the right way. Let’s not let a good crisis go to waste.

 

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