Fostering Customer Loyalty through Data Security
Data security today
Increasingly detailed customer data is being collected and stored to help businesses gain insights into their customer base; as such, it is the business’ responsibility to protect that data. With rising cybercrime and data loss threats affecting companies big and small, data security measures have become a necessary expense for all those who collect data. And as time goes on and data breaches – both internal and external – are a real threat, stronger data protection policies and procedures are needed, along with continual updates and reviews.
This has been seen as a purely defensive mandate for a long time, but is that still the case? In a word, no. Times have changed, and along with this, customer perception has changed too. In a world where it has become the norm to accept browser cookies, it is not the collection of data customers are concerned with – it is the protection of it. As a result, data protection is so prized by customers that it is being effectively used as a selling point for companies who invest in strong data security measures.
In a recent Corinium report, only 12% of surveyed business leaders said data security wasn’t a priority for their organisation. While they are in the vast minority, that is still a troubling figure given the implications of data breaches. Of the vast majority who did respect the privacy of data for their customers, 62% of respondents focused on mitigating internal threats, while 55% used measures to mitigate external threats. However, the most commonly cited benefit for strong data security was in fact improved customer loyalty (64%).
Why investing in data security makes sense
The fact that data security has become a selling point makes it a win-win situation for both companies and customers. But what are the reasons behind customer interest in data protection measures?
Firstly, customers like to rest assured that their data is kept safe and used only for the purposes they have agreed to. This builds trust in a brand. However, by increasing security further and publicising security improvements to customers, they start to feel as though they and their data are valued, protected, and basically important to the company. That subsequently builds customer loyalty and therefore provides repeat custom and reinforces the brand as positive word-of-mouth is spread.
For the most part, customers are aware that their online activity is used to improve products such as websites, therefore they may accept cookies to assist with this. As such, it is no surprise that they appreciate it when their willingness to share and assist is respected through advanced data protection. Thus, a company can provide customer value, elicit trust and foster continued loyalty.
The same Corinium report found that 52% of surveyed business leaders were actively using these protection measures as selling points to acquire customers. Another leader was quoted saying that cyber security had moved from expenses into revenue on their balance sheet, due to the customer loyalty their data protection generated.
In addition to the revenue boosting effects of customer loyalty, there are several further benefits to data security. The report showed investments were most commonly made into cyber security (invested in by 72% of respondents), data back-up (53%) and for cloud data protection (50%).
How to foster customer loyalty through data security
There are multiple ways to increase data protection and security, but the main benefit of strong data security was cited as being the improved customer loyalty. As customer loyalty drives more revenue than one-off customers, it is well worth exploring how increasing data security can be used to foster such loyalty.
Follow data protection regulations
There are legal implications for individuals and companies who do not comply with the Data Protection Act, so ensure you stay up to date with the associated laws and legislation. As data collection, storage and analysis are developing technologies, new legislation is still being released. Keep yourself and your company up to date with these changes as they occur, to ensure you remain aware of new threats and legislative requirements.
Invest in data protection training
Ensure your employees are equally aware of the associated risks and legal implications of a data breach. Employees must be trained in how to safely accumulate, store and use data. When using data insights, the flexibility of storage and enrichment is a popular priority for many businesses, however it is important to note that this flexibility also reduces the security of data. A balance should therefore be struck between gaining insights from data, and protecting the users who provide you with them.
An introduction to data security should be compulsory for all new employees, and the use of encrypted passwords should be recommended, or better yet – required. Employees should be empowered to speak up about data protection concerns, potential data leaks, and to suggest methods of strengthening your data protection. By allowing open and honest communication in the workplace, security threats that have been overlooked will be brought to light before a breach of data security can occur.
Collect only essential data
With the legal implications of data breaches, and the associated bad press, it is advisable to collect as little data as possible in order to provide the business insights you need. The more data you collect, the higher the likelihood that hackers will notice you.
Collecting only what you need is good practice across the board, as it means you will pay less for data storage, cleaning, and analysis – as there is less unnecessary data to filter out. But it also allows your customers to feel more secure, and reduces their suspicions about why you need so much data from them, and how you might use their data.
Be transparent
Tell customers what data you want to collect and why. They will be morfe inclined to accept cookies if they are used to actively benefit them – such as through personalised website experiences, or to improve your products to better suit them in the future. By being transparent and telling the full truth, customers will respect your honesty, be able to make an educated decision, and dispel the growing suspicions they might otherwise have about your intentions.
Have a data protection plan
This is a must. If you are collecting data, you are morally and legally obliged to protect it. Make sure you have a robust data protection system in place, or hire an experienced and reputable specialist to do this for you. Even if data security is in place, data loss can still occur, so ensure you take regular and secure back-ups of customer data, and put strict data rules in place to limit access and ensure that only the right people have access to the right data in order to fulfil their duties.
Investing in your data security
Data security is a real and growing issue, and with the majority of companies now harvesting data for insights, it is extremely important to understand the risks and implications associated with unprotected data – and how to protect your company against them.
It is unfortunate that both internal and external threats are now a serious concern when it comes to the protection of data, but it is positive that customers appreciate enhanced data security measures to the extent that data protection has become a new value creator. No longer simply a defensive measure; as we have discussed, active and reviewed data security measures have been found to now attract customers and foster customer loyalty.
Take the first step – check out the Pangaea X platform to find experienced and reputable data experts who can help you in your business’ data analysis while ensuring your data is protected.
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