Amidst increasing privacy concerns, businesses around the world, especially tech-oriented firms, are looking to make changes in their policies. Many businesses are investing in policies that are privacy-forward and help boost growth. Since the rise in privacy concerns has resulted in more companies building privacy security policies, large tech-oriented companies are also a part of the process. Several companies that previously hid their data use practices are also moving towards sharing privacy concerns and related messages.
Businesses’ use of data and consumers’ data privacy management issues leaves a huge gap. And the companies that capitalize on that gap are bound to experience the most tangible growth in the upcoming compliance regulations and changes. This paper will discuss how that’s possible!
What is Data Privacy?
A few years ago, if a sales team manager was to introduce “privacy” as the new strategy to increase sales, it would’ve resulted in confused looks and a lot of questions. But today, privacy concerns are more rampant than ever. Nevertheless, some professionals are unaware of what “data privacy” actually refers to.
Data privacy, aka information privacy, refers to the rights of consumers and businesses. It highlights how a business can and can’t use customer information to determine business growth and funnel sales. Data privacy also shows how an organization can use consumer data and share it with third parties without invoking consumers’ privacy rights.
As a concept of human rights, businesses must value consumer privacy at all times, whether it’s about simple website cookies or a consumer’s purchase history. An individual has the right to control the collection, use, and dissemination of data by organizations.
How is Data Privacy Different from Data Protection?
Some organizations still confuse data privacy with data protection. Despite the fact that the two terms are used interchangeably sometimes, they are very distinct concepts. While one concept deals with the technical aspect of the concern, the other concept deals with the control side of it. Data privacy means control over consumer data and how it’s collected, used, and disseminated. On the other hand, data protection or data security is about ensuring safe technical control.
Data protection is about keeping consumer data safe from hackers and other cyber threats at all times. It also refers to confidentiality, availability, and integrity. The overall purpose of data protection or data security is to keep consumer data safe from malicious cyberattacks. Furthermore, it’s a legal obligation that all businesses involved with data collection and storage have to follow.
The Rise of Privacy-Focused Technology Startups
What’s the main reason behind the popularity of privacy-focused technology startups around the world? There’s an array of reasons that increases the value and improves the consumer perception of privacy-oriented tech startups across the globe. A 2020 survey showed that nearly 90% of people surveyed were willing to switch to companies and brands that were privacy-focused. Hence, the rapidly expanding rise of tech startups that focus on privacy around the world. Here are some more factors behind the market’s rise.
Data Privacy is Important for Your Brand
Since the majority of businesses are somehow connected to each other, the environment is highly interdependent. There are various examples of interdependent businesses. For instance, a company might use a separate email marketing service provider, a different hosted web store, and may have a completely separate website hosting operation in place. Hence, businesses use consumer data to perform a range of different operations. But more importantly, consumer data helps businesses learn how they should perform operations.
In a B2B business, such as business partners dealing with affiliate marketing and associated firms, information is constantly transferred between entities. With that said, all entities will have a different approach to collecting, storing, handling and processing the data. It’s the case with referrals, where information about customers and potential users is always flying from one entity to another.
For those specific reasons, data privacy is more than just a few paragraphs embedded in the comprehensive terms and conditions agreements. They represent a set of rules and standards that can impact a brand significantly. It can disrupt customer experience and lead to a poor reputation for brands.
As per a recent study, nearly 72% of the people interviewed declined to share information with firms due to “privacy concerns.” Data privacy is a competitive advantage that helps customers trust a business more than other businesses in the same industry to receive products/services.
Data Privacy Is Instrumental to Business Growth
In simple words, data privacy is a strategic opportunity for businesses to stop thinking about it as a protective measure, but rather view it as an approach directed towards growth. It’s equally beneficial for startups, entrepreneurs, and large corporate firms. Since a lot of ISPs are already collecting customer information and selling it to various organizations for a profit, consumers are being proactive. Today, consumers want to take better safeguarding measures to protect their data privacy rights and preserve sensitive information that could make them easy targets for businesses.
It’s true that a lot of privacy concerns come from interconnected technology such as mobile phones, sensors, and other household devices. The interconnectedness of various devices raises even more security concerns for customers around the world. And with that, the already booming privacy-forward market will receive a significant boost, resulting in even more market opportunities.
While the previous multi-billion dollar and user companies such as Google were built around collecting customer data, the future multi-billion dollar and user companies will be built on protecting user data. The rise of privacy-selling companies and tech startups will give birth to new opportunities to build fresh businesses.
Customers Value Data Privacy
Another reason behind the rise of privacy-focused technological startups is that customers value data privacy more than ever. Users are not in the dark anymore as they come to learn about some of the bad companies around the world that have been exploiting customer data for profit maximization. Now, consumers know about their data privacy rights and how they’re always sharing information online. And as users have access to an extensive range of interconnected technology, they realize it’s important to protect their information now more than ever.
Over 4 billion people worldwide regularly use social media and the Internet. They are connecting with various platforms at once and sharing as much information as possible. Internet and social media users research products and services before making a purchase. Some consumers are even willing to share their preferences and provide more information during their social media interactions. All of that information goes to big companies such as device manufacturers, desktop apps, mobile applications, and internet service providers. They can then sell the data to other businesses or use it for their own purposes.
In many instances, consumers are willing to share data such as opinions, locations, photos, and videos. However, customers are more protective about their information, especially when it’s related to their finances, health, or family. A large proportion of users are concerned about their service providers using their data and selling it to other businesses for financial gains. So, it’s true that when a customer visits a website, whether it’s a social media or business website, they’re thinking about privacy and what kind of information will be extracted from them as they browse the website.
Can a Company Boost Sales and Profits via Privacy?
It’s quite impressive to see how new businesses are erupting in the privacy-focused tech space around the world. As customers learn about their privacy rights and grow aware of data exploitation, entrepreneurs think it’s a great opportunity to sell privacy policies and associated services. Even with more companies springing up, sustaining the growth of the privacy-focused industry will require overcoming major issues. The main issues include data privacy processes, changing regulations, and frequently updated privacy laws.
Despite that, many companies and teams fail to acknowledge privacy as a great sales strategy. Although most of them are intimidated by increasing privacy laws and changing regulations, they must realize how privacy could impact their revenue and sales growth. Since privacy is all about protecting and using customer data appropriately, it could result in more customer trust. Plus, when customers trust a business, they’re more likely to purchase products and services from it, knowing that the company won’t exploit their information like others.
As far as the rise of privacy-focused tech startups is concerned, the number will keep increasing. That’s because global spending on privacy efforts is expected to reach up to $8 billion by 2022. That shows how businesses are more than ready to invest in privacy and make their customers trust them. Brands will gain more value and experience in the privacy business. They can also use privacy as a sales strategy because it will involve using critical and only useful information for gaining insights into customers without exploiting or breaking the trust of customers through copious amounts of data.
What Kind of Value Does Data Privacy Protection Bring?
Data privacy and protection add value to a business in different ways. When a company focuses on building better data privacy policies and measures, it improves investors’ and customers’ trust. In addition, when customers increase their trust in a brand, they also become more reliant. That potentially results in higher sales revenues and better growth opportunities. Here’s a detailed look at how businesses benefit from data privacy protection:
Brand Value Improvement
It’s no secret that once a company complies with necessary data privacy concerns and issues, customers will view it as a reputable company. As customers see that the company offers data privacy and protection, they will consider it to fulfill their products/services demands. Consequently, when customers feel that they have control over what type of data they provide and how the company uses it, they will certainly build trust with that company. This could lead to a long-term relationship and brand value improvement.
A brand’s value can increase exponentially when it offers a reliable security environment with the help of a data privacy program. A privacy program generally refers to a collection of different customer privacy rights, company privacy policies, compliance, and all other necessary regulation that help a company transport its overall perspective of privacy in operations. It’s a program that’s generally different for every other brand and company but offers the same types of benefits and competitive edge. It can drive the higher value of an organization in the market and make it easy for customers to choose it as their service provider.
Ethical Support and Morale Boost
Following the latest privacy guidelines and legislation will keep a company safe from any legal penalties or misconceptions on behalf of consumers. Eventually, with higher customer trust and safe data collection, storage, and processing, the companies’ experts will feel motivated to be ethical and responsible. Including modern privacy programs and focusing only on the data that a business requires to operate and improve can increase productivity, which boosts morale as well.
Investor Trust and Loyalty
Investors will feel more comfortable having a vested interest in the company. When customers trust the company and sales keep increasing as part of the privacy program-associated sales strategy, it will improve the brand’s value in the market. When a brand becomes popular and easy for customers to trust, investors will automatically perceive the firm as a viable investment.
Business Data Breach Prevention
With proper data privacy programs, the company will have to install the latest security and handling measures. This will automatically reduce the chances of data breaches. As we mentioned before, data privacy is a technical aspect of the data protection concept.
Seeing Data Privacy as a Competitive Advantage
Data Privacy as Sales Strategy
It’s a fairly new concept that is still gaining momentum across various markets and industries around the world. However, expert analysts and professional researchers have considered the applicability of data privacy as a sales strategy. It’s no surprise that earning customers’ trust and loyalty can result in growing sales revenues. However, data privacy can influence how you try to gain their trust and loyalty.
In simple words, if you plan robust data protection and privacy program, you may experience a boost in sales. Why is that? Firstly, consumers trust brands and companies that protect and store customer data appropriately. Secondly, implementing the latest security and privacy measures will give your operations a new look and increase efficiency. Thirdly, the use of privacy programs can influence how you organize and optimize the data in your hands. Hence, it could significantly matter as a sales strategy to use data privacy programs in your organization.
Customer Trust Improvement
As discussed earlier, customers know how some companies across various industries keep using consumer data and exploit it for their own benefits. With increased awareness, customers are trying to find companies that offer proper data privacy assurance and regulation. Customers ask a few important questions before purchasing products or services from a company/brand:
- Can I trust this brand or company with my information (aka data)?
- Will this company use my data appropriately or exploit it for its own gains?
- Does this brand already has any privacy issues from before, and does it presently focus on the latest data privacy concerns or regulations?
If consumers don’t feel confident in sharing their data with you, they might consider another option. This can be detrimental and could mean a fatal blow to your customer base. On the other hand, if you answer consumers’ questions about privacy with satisfactory answers, they will make purchases and consider you for future purchases. It could strengthen the customer base and improve sales.
Operational Efficiency Increase
Has your company become subject to data privacy regulations or changes recently? Well, you will be subject to privacy regulations sooner than later. That’s because the best data privacy and protection practices keep evolving around the world, resulting in higher customer expectations. If your company doesn’t meet the latest privacy regulations, you’re letting your competitors take the lead.
With all the privacy concerns in modern business society, it is a question of whether you’re going to embrace or reject the latest privacy programs. Every business has to create and own a privacy program. Even if you don’t have the talent or expertise to create a privacy program for your organization, you can trust someone outside your firm as well. It will help make operations efficient and free up space at your firm.
Large-Scale Data Optimization
Some companies assume that data privacy will limit their ability to produce accurate customer profiles and customer groups. They may be thinking wrong because most privacy legislation is properly-planned, so it doesn’t impose many restrictions on how they create customer profiles. But with the help of a privacy program, customers will be safe, and firms will not be able to collect large amounts of their data that they don’t need.
But, they’re missing out on an important factor, when a company doesn’t collect copious amounts of information and spends thousands of hours organizing it for no use, later on, they’ll be saving space at the company. While they save a lot of space, they’re pinpointing the type of data that the business actually needs.
In simple words, as the need for unnecessary customer data dies down, you focus on the type of data that can actually help your business achieve growth. When there aren’t many data sources or amounts, your data team can figure out the critical information your organization needs to complete business operations. It will ultimately increase efficiency and productivity.
When customers recognize a brand or company as reliable in terms of data privacy, they do their part by offering high-quality data that can actually result in a better customer experience. Plus, when customers know that a company doesn’t exploit data and abstains from targeting customers with their marketing campaigns unethically, you’re more likely to get accurate birthdays, email addresses, and phone numbers.
Bettering Customer Retention and Loyalty
Over 30 percent of customers in the industry have stopped shopping and purchasing with companies they recognize as data exploiters. Well, some “Privacy Actives” or, as people like to call them, “people concerned about their data privacy,” have started raising serious questions. On top of that, many customers now know how to check if a company selling products or services complies with the latest privacy programs, regulations, and legislation. In summary, customers leave brands that don’t comply with data privacy. In fact, some professionals believe a huge proportion of customers might be willing to pay more for the same services or products to a company that complies with the necessary data privacy concerns than to one that doesn’t.