After two years of major pivots and accelerated digital transformations, brands are taking a close look at the way they handle customer data.

There's no question that the insights companies draw from that data are valuable. "Insights-driven firms will be three times more likely to outperform their competitors" in 2022, Forrester Analytics forecasts.

However, to get those insights and deliver more accurate personalization, data needs to be easier for companies to access, and the process for sharing it needs to be easier for customers to access and understand.

There are three main challenges organizations must meet to make those improvements.

Unifying and Organizing Customer Data

The biggest challenge brands are experiencing is how to unify the massive amounts of customer data that they collect across all channels and touchpoints. Right now, that data ends up in silos, where it's difficult or impossible to use effectively.

For example, only 38% of marketers say they have the customer segment and persona data they need in the right format to make good marketing decisions, the Capgemini Research Institute CMO survey in March and April 2021 found. Without proper access and format, personalization is inhibited or off the mark.

Creating Transparent Data Permission and Control Experiences

The second challenge is how to improve the way customers are asked to grant data permissions and the experience they have adjusting those permissions. Brands need to review their end-to-end data collection experience to see where it can be improved.

Often, privacy and data use terms are intentionally obscured by, for example, long and hard-to-understand Terms of Service text that customers have to check off on. Or, as another example, the cookie consent popups that appear on virtually every website now often have tiny text, so consumers don't really know what they're consenting to, or they have a hard time finding the opt-out choices.

Those are poor customer experiences, both from a communication—and trust—standpoint and from an efficiency standpoint. Imagine customers' response if they walked into a store and were blocked by security asking for identity documents before they could shop, requiring them to sign an agreement they didn't understand.

Preparing for Customer Data Information Requests

Companies need to expect customer questions about data collection. As a result of regular news stories about corporate data breaches to documentaries about how social media uses data, public awareness is increasing around how personal data is collected, stored, protected, and used.

Based on that trend, I anticipate an increase in data subject access requests—customer inquiries provided for by law, such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). Responding to those requests may be a challenge for enterprises, so the time to plan is now.

Best-Practices for Balancing Data Collection, Privacy, and CX

Once those three steps are implemented, companies have various ways they can use their more unified data to improve the customer experience.

Empower your customers

Give them control over what data they share and how you engage with them. One option is a self-service portal where they can set preferences for data sharing and contact channels for shipping notifications and promotions.

Show customers what you know about them

When customers come to your website, can they see information you already have, such as their purchase history and previously viewed items? What about their contact preferences?

Reminding the customer of what data you have and why you have it helps to build trust.

Make it easier for your customers to do business with you