Improving the customer experience: CIOs look beyond business technology to privacy

As we progress into 2021, it’s becoming clear that a customer data paradigm is needed, and CIOs must work with other digital leaders to protect privacy and strengthen consent.

In today’s digital-first economy, it’s imperative for privacy and consent to be built into the foundations of marketing programs and underlying business technology. In fact, nine in ten senior marketers nominate it as fundamental to the customer experience, according to Adobe’s 2021 Digital Trends report.

Personalising the customer experience based on customer data ranked as the top opportunity among emerging marketing capabilities, according to the more than 13,000 marketing and technology leaders who participated in the study.

However, the way organisations use customer data is considered a brand differentiator for 40 percent of those firms that have invested significant time and effort in customer experience management.

Only one in five respondents say their organisation is “very effective” at communicating how customer data is collected and used. Just one in two say privacy and consent are key factors in their planning.

“We’re stuck in this dichotomy between ‘know me’ and ‘respect me’,” Adobe Chief Transformation Officer Scott Rigby says. “Customers want you to know them but they want you to respect the data they provide to you.”

Complicating this dynamic is the fact that customer data details are handled by multiple teams in three out of four organisations, according to the report. Typically these include IT and legal, as well as marketing.

Meanwhile, close to six in ten IT executives see themselves as chief custodians of customer privacy, according to more than 1400 IT respondents that took part in the study.

As 2021 gathers pace, it’s becoming clear that what’s needed is a customer data paradigm; one in which CIOs and other digital leaders work with the chief users of customer data — the marketing department — to protect privacy and strengthen consent. This operational shift is what will build trust, enabling organisations to use customer data — with their permission — to deliver a better experiences.

Role of business technology leaders expands

When it comes to data, IT teams have traditionally focused on the security risks involved in banking personal data, ensuring it is safely collected, stored and protected from data breaches.

However, analysis of the responses from business technology leaders in the Digital Trends report reflects the broader role IT executives are taking as digital transformation speeds up, with seven in ten believing they should be responsible for business transformation strategy.

According to Deloitte US CIO Doug Beaudoin, technology is increasingly becoming inseparable from business. “Systems and processes connected with customer data and platforms require tightly linked IT and business strategy expertise,” he says.

New priorities for CIOs in 2021 include ensuring firms are customer-obsessed, future-ready and prepared to manage systemic risks to avoid crises such as data breaches, the research shows.

Nine in ten IT respondents say customer experience priorities are pushing IT to work more closely with other parts of the business, with a similar proportion saying IT is involved in choosing and implementing CX technology.

A large majority of IT respondents (47%) say they should lead customer data strategy, but implicit in that involvement is the need not only to manage and integrate data systems and store data safely but also understand the changing privacy landscape.

Understanding the impetus around privacy

Privacy and consent play a crucial and increasing role in the ability of businesses to market to their customers following the emergence of global standards driven by the European Union’s General Data Protection Regulation legislation.

“The world has reached a threshold where the European baseline for handling personal information is now the de facto global standard,” says Nader Henein, Research Vice-President at Gartner. “Lawmakers are introducing new privacy laws that seek parity with the GDPR.”

Across Asia Pacific, governments, including India, Thailand, Australia, Indonesia and Singapore, have introduced or proposed new privacy or data protection laws since the introduction of the GDPR in 2018.

As estimated by Gartner, the proportion of the world’s population covered under modern privacy regulations will increase six-fold in just over two years to 65% by 2023, highlighting the speed of transformation in the domain of privacy.

Structuring data for compliant use

This growth in privacy regulation, combined with the personalisation imperative involved in delivering a great customer experience, means CIOs — along with their counterparts in information security and risk management — must focus on ensuring data is organised for safe future use.

“Security and risk management leaders need to help their organisation adapt their personal data handling practices without exposing the business to loss through fines or reputational damages,” Henein says.

Chaminda Ranasinghe, Chief Experience Officer at higher education institution RMIT, which has campuses in Australia and Vietnam, says not ensuring data is structured for privacy-compliant use also risks rendering organisations and their marketing messages irrelevant.

“You’re not relevant if you can’t personalise the customer experience,” Ranasinghe says. “You might as well give up on that individual now.”

At RMIT, a chief data officer works with the IT, legal and marketing teams to ensure customer data, including that of sensitive cohorts, is managed for compliant use.

“The chief data officer makes sure the data is managed properly so that it is structured to allow us to get the best out of it,” Ranasinghe says.

“We have to connect with students who are often under 18. I have a very different risk lens for that audience compared with post-graduate students.”

Using technology to minimise data risk

According to the 2021 Digital Trends report, customer permission to share data is a function of trust, which most believe is shaped early in the customer relationship. One in two CX leaders “strongly agree” that “how a brand handles customer consent in their first interaction shapes trust going forward”.

Adobe’s Scott Rigby says it’s a responsibility Adobe takes so seriously, it has taken the rare step of building privacy and consent management into its customer experience technology.

“We’re one of the few companies trying to resolve that from a technology perspective,” he says. “Adobe Experience Platform labels data based on consent or the lack thereof, so as we’re collecting this data it’s being ring-fenced and utilised in a judicious way.”

Rigby makes the point that as the expansion and development of privacy and consent regulations continue, technology and those who manage it need to become part of the solution.

“Privacy is becoming a moving target as more regulations are evolved and updated,” Rigby says. “It’s too big to manage manually. The CIO is going to have a big role to play here because they own a big part of the data that marketing obtains.”

The end of third-party cookies

Further complicating privacy and consent is the shift away from third-party cookies that enable organisations to track and target individuals as they move around the internet. This phase-out, supported by the likes of Google and others, is forcing organisations to get better at collecting, managing, leveraging and respecting first-party data.

Sixty percent of senior executives expect this to have a disruptive effect on their marketing activity, the Digital Trends report indicates, while only 17 percent believe their organisations are “very effective” at gathering first-party data to deliver strong experiences throughout the customer journey.

According to Sarla Fernando, Regulatory Lead for data-driven marketing association ADMA, the issue is prompting greater corporate focus on privacy and regulation as a whole.

“[Organisations] look at cookies, then start to wonder where do we go next,” Fernando says.

“Then they start to analyse the situation and understand there is change coming with adtech transparency and there’s also change happening with privacy. It becomes a very big regulatory conversation.”

It’s a conversation that not only involves IT but sales, marketing and customer experience teams as well as legal and risk.

Ranasinghe says marketing and experience teams typically have to balance the attitudes of more risk-averse teams, with those of revenue-driven teams.

“As a CMO I think our job is to find the right balance between collecting and using data and the risks that entails, and the risk of not using data to personalise the experience,” Ranasinghe says.

“You’ve got to find the middle road and understand the customer’s appetite to share data. It ultimately delivers them a more personalised experience, which is the reward for their effort.”

Discover how first-party data can deliver first-rate experiences. Prepare for a world beyond third-party cookies now.