The acronyms for the latest data privacy regulations have become part of the marketer’s lexicon. “How will GDPR affect our business?” and “Can we still operate our loyalty program in California post-CCPA?” are typical of the conversations heard in the halls (or now more likely on the Zoom calls) of every customer-facing business.
Consumer-facing brands in the U.S. are contending with a growing array of consumer privacy laws. There has been no creation of a federal standard for data privacy; instead, the states are walking a path to create statutes that treat consumer privacy through their respective lenses, and California passed the most comprehensive law to date with the California Consumer Privacy Act (CCPA). Other states will follow in the creation of their own statutes, but for now, all eyes are on California as a proxy for the rest of the U.S.
It was just over two years ago, in May 2018, when the General Data Protection Regulation (GDPR) became effective in the U.S. We haven’t heard as much about GDPR over the past year as CCPA drew the spotlight away from the European standard. If you have been watching this space closely, you may have noticed that just last month, the European Court of Justice (ECJ) issued a ruling that invalidated something known as the Privacy Shield, an international standard in place between the U.S. and EU governing the transfer of personal data between the regions.
The regulations coming from Europe are designed to manage the transfer of EU citizen data out of the EU to the U.S. For once, marketers are not all to blame for drawing the ire of consumer privacy advocates: The ruling in what is known as “Schrems II” cited the principal concern to be the handling of consumer data by the U.S. National Security Agency.
How did we get to this point, and how can you prepare your business for what is to come next?
We have worked with many companies that have data that is incomplete and lacks marketing utility. It’s fascinating that business practices for managing consumer data show big gaps between the current status of data management to full potential while concerns over the protection and management of the data are skyrocketing. Maybe it makes sense because since the 1980s, brands have demonstrated a high proficiency at collecting data but haven’t done a great job at managing that data to serve customers better. The Delphi Report, an annual report published by the Wise Marketer, posed the question of why loyalty programs fail in its 2019 edition. The No. 1 reason on the list was poor use of data.
This should not come as a total surprise. As a frequent flyer program member for decades, I’m still receiving offers for golf vacations. Golf is a great game, but I don’t play it. Why does this practice continue? Because the airline has never taken time to query me and better understand my preferences for hobbies and lifestyle.
Loyalty programs are…
