In commemoration of Data Privacy Day, we’re exploring the implications of social data as both an instrumental marketing tool and a privacy concern for businesses.
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As more and more users sign in and input personal data into social networks like Facebook, Twitter, and Google, these sites accumulate mountains of actionable insight into their users’ backgrounds, interests, and purchasing habits. Businesses that tap into this user data can better understand their customers and gain a huge leg up over their competitors.
Sounds like a marketer’s dream, right? There’s a catch: Social data comes hand-in-hand with big responsibility. More specifically, businesses with access to social data must exercise transparency over data usage and make it a priority to uphold users’ privacy rights.
Users are both concerned about their privacy and generally uncomfortable with the idea of handing over personal data to corporations. In the wake of these concerns, it’s increasingly important for businesses to communicate clearly with their online audiences about how their personal information is being stored and leveraged.
Big Data can be Tricky
As social data continues to increase in volume, businesses can analyze and utilize user information to create relevance, context, and personalization around their marketing efforts. At the same time, though, consumers are often left in the dark about what corporations can and will do with their personal data. A study of over 2,600 U.S. consumers revealed that 40 percent of consumers choose not to sign in using their social identities because they are unsure of how their personal information will be used. When users opt out of social login, businesses miss out on valuable opportunities to glean from a rich, existing well of behavioral and demographic data about their customers.
It All Starts with Trust
How can businesses optimize their marketing strategies by reducing user apprehension towards data sharing? The key is transparency and integrity, according to Gigya CEO Patrick Salyer (@patricksalyer). Rather than approaching personal data sharing as a take-all relationship, corporations need to respect user information by protecting it and using it appropriately. Businesses also need to offer value for users who share personal data.
“Promise your users that you’ll do the right thing by offering a ‘virtual handshake,’ where users grant you access to their data in exchange for value (often personalization or ease-of-use) and transparency,” Salyer advises. “Building and maintaining trust with customers is critical for any business, big or small, on or offline. It’s not just ethical to be transparent about how you use your customers’ data – it’s good business.”
Building customer trust takes time and effective communication. Read on to learn about best practices.
-Emma Tzeng, Marketing @gigya
