Privacy vs Personalization: 5 Ways To Strike a Balance in This Data-Sensitive World


With improvements in technology, customers want brands to provide solutions, products, and personalized services. At the same time, more people are also becoming concerned about their data privacy. Hence, maintaining customer data privacy is of paramount importance. How can marketers achieve a balance between data privacy and personalization? We discuss it here.

Marketers and brands today share a complicated relationship with their customers. On the one hand, shoppers want businesses to understand their needs based on their buying patterns and interests. On the other hand, they are also worried about data privacy. Various types of scandals and data leaks have led to growing customer distrust  in brands. According to a studyOpens a new window by Secure Swiss Data, 90% of consumers were worried about businesses collecting and selling their personal information without permission. Such scandals created the need to implement legislations such as the General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA) to protect consumer data. In such a scenario, how can brands and marketers offer personalization while protecting customer data?

Here are five practices they should follow to achieve it.

Concerns over data privacy
Source: Secure Swiss DataOpens a new window

Learn more: Personalization vs Data Privacy: What Is The Future of Customer Experiences in a Post-Pandemic World

1. Make It Simple and Transparent for Consumers To Share Data

One of the best ways to build trust with customers is to be transparent with them about why, how, and for what period companies are collecting their data. While many companies mention and follow these in their privacy policies, some companies still leave customers dark, especially when implementing artificial intelligence (AI). According to a 2018 studyOpens a new window  by Genpact, more than half of the consumers do not feel comfortable with the idea of companies using AI to use their data.

Besides mentioning it in their privacy policy document, companies should also ensure that they communicate their policies to the customer in a simple language. They should also ensure that this is easily accessible by the customer. Customers often encounter a lengthy privacy policy that runs into pages before they click on the checkbox that says, ‘I agree’ for handing over their personal information. Such documents are not helpful to the customer.

Alexander Igelsböck, CEO, Adverity, says, “Brands can use data privacy to develop trust with their audience by communicating how they are taking care of their customer data and remaining compliant. Transparency is more than giving customers the options to manage their data, it is also about the way in which it is done, for example, by using language that is easy to understand and keeping the user informed on policy changes with easy-to-access summarized versions during various touch points. The repositioning of data privacy to a customer-centric perspective, when done right, is also a brand elevating exercise for marketers, and respectively the brand, to set themselves apart from the competition.”


Jeff Meglio, VP global demand, Sovrn says, “marketers can provide readers with more information on how and why they are being targeted. Think of YouTube’s “Why do I see this ad.” Similarly, resources that educate readers on the technology behind advertising could help reduce the amount of uncertainty-induced fear that audiences experience. Again, transparency leads to trust.”

2. Collect Only That Data Which Is Required To Provide Value To Customers

In addition to being transparent, brands can build trust with their customers by collecting only the necessary data. According to researchOpens a new window by Gartner, consumers believe that brands try to personalize their campaigns to prove:

  • They know their customers
  • They can help them

However, consumers see more value in the second category – personalization efforts that offer them help during the purchase process. Customers are more open to sharing data if they find the appropriate value in exchange for their data.

For example, according to Accenture’s studyOpens a new window , about 60% of consumers are willing to part with their data, such as lifestyle information or location data,in return for lower prices on products or services. Amazon’s offers and product recommendations to its customers when they log into the portal is another example of providing such customer value. Hence, when brands collect customer data, they should use it wisely to offer them the right value.

Learn more: Data Privacy and Marketing: Experts Share How to Fix Customer Trust and Win Over Audiences

3. Make Campaigns More Relevant

An important aspect of personalization brands, often forgotten, is relevance. Personalization often looks something like this in today’s scenario, a customer would have given his/her details to a retail business when they purchased at some point. Since then, the retailer would have started sending them messages either daily or multiple times a day related to various offers, whether it is relevant or not. Retailers may also be sending messages on products that may not be relevant to the customer anymore. These messages can potentially overload customers forcing many of them to unsubscribe from those messages.

According to a Gartner study, among people who received personalized but irrelevant marketing messages, about 48%Opens a new window of them would unsubscribe from future communications from the brand. Furthermore, about 14% of consumers said that they would completely stop doing business with these companies.

Hence, brands should use customer data to send them only relevant messages to them. Another important part of being relevant is to use the right channel or touchpoint to send customers communications. For example, many people find it creepy when they search for a product on an ecommerce portal, and the ad starts following them on all the online platforms. According to Inskin Media’s customer surveyOpens a new window , retargeted ads evoked two primary responses, annoyance and frustration. Hence, retailers should give customers the option of where, how, and what communications they want to receive.

How customers feel about retargeting ads
Source: Inskin MediaOpens a new window

4. Develop Agile Personalization Strategies

The advancement in digital technologies is bringing in rapid changes in customer behavior. Furthermore, the COVID-19 pandemic brought drastic changes in customer priorities and buying patterns. For example, a reportOpens a new window by Statista showed online traffic in the supermarket industry rose to about 34.2% in the first week of September 2020 compared from January to February 2020. Similarly, it dropped by 41% in retail healthcare during the same reference period. Hence, earlier personalization strategies that rely on historical data will not be useful in these rapidly changing times.

Marc Carrel-Billiard, innovation global lead, Accenture, says, “COVID-19 has brought with it some specific challenges around personalization strategies that firms will need to consider. For a start, much of the ‘black box’ analytics that have driven personalization efforts to date rely on historical data. A lot of this data is now relatively useless, given the scale of change we are living through. If businesses are going to deliver services that meet the needs of today’s digitally engaged consumers, they will need to embrace much more agile engagement strategies.”

He further says, “To be successful, businesses need to relearn their customers’ wants and needs from scratch. The simplest way to do this is to turn to the customers themselves. By giving customers control and influence over the services they use, businesses can organically learn about what matters most to them.”

5. Companies Should Enhance Data Governance

In addition to being careful about how companies collect and use customer data, they should also be cautious about protecting their data. They should enhance their data governance as well as relook at how they store data. The world has witnessed an increase in malicious activity in recent years. Hence, there is more need for protecting sensitive customer data. The company’s data protection frameworks should spread across its IT environment. Additionally, companies should empower their employees to address data privacy during their customer communications.

Learn more: Transform Marketing Organizations with an Agile Marketing Approach

Shonodeep Modak, chief marketing officer, North America, Schneider Electric, says, “Data security and privacy are critical aspects of customer trust in our company. To preserve this trust, we have built standards, policies, and procedures to ensure cybersecurity and privacy are constantly addressed in every product and service we offer. It also means we empower our employees to take an active role to help keep people, assets, and operations secure for our customers and ourselves. As we identify threats, we place transparency at the utmost importance in our customer communications and action plans. Furthermore, we proactively engage them to take specific actions to improve their security.”

To Conclude

Offering personalization while maintaining data privacy may seem like a tight-rope walk. Companies can achieve this balance by focusing on three key aspects: transparency, relevance, and effective data governance. Getting them right will help brands comply with data privacy regulations, build customer trust, and still deliver campaigns that provide value to their customers.

How do you think brands can achieve both data privacy and personalization? Do let us know on FacebookOpens a new window , TwitterOpens a new window , and LinkedInOpens a new window .