By Richard Huff

Organizations collect and store personal customer data for a wide range of purposes, including marketing, fraud prevention, and identity verification. As a result of the public’s concern over how their personal data is used and shared, regulations have propagated at state and federal levels to establish consumers’ data privacy rights. Organizations must now balance their needs for customer data against the customer’s right to privacy.

Data privacy regulations, such as the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) in the United States, are projected to cover 65% of the global population by the end of 2023, which is sharply risen from roughly 10% in 2021. These regulations include penalties for organizations that do not abide, based on the location of the customer and not the organization.

This presents a challenge as customers’ personal data is vital to an organization’s marketing efforts. Digital advertising relies on personal data to serve up offers and promotions tailored to a customer’s interests. Organizations leverage cookies, preferences, and first-party data to deliver highly personalized marketing. Google, the largest digital advertising platform, has announced changes to how its products will manage and deliver digital ads. Google will phase out support for internet cookies, driving organizations to rely on first-party data collected directly from its customers to support personalized marketing.

Consent and preference management (CPM) technology encompasses two aspects of data privacy. Consent management refers to the collection and management of customers’ explicit permission to collect, use, and share their personal data for specific purposes. Preference management involves allowing individuals to define and manage their preferences related to how they interact with an organization. These preferences can include communication channels, frequency of communication, content types, and more. Preference management is used to enhance the customer experience and personalization while respecting individual choices and consent.

A number of vendors offer cloud-based CPM solutions to organizations. These solutions use packaged and customizable application programming interfaces (APIs) to collect data from an organization’s back-office systems, including accounting, sales management, and customer relationship management systems. The collected data is assembled to create detailed customer profiles to be used for marketing purposes, which are also used for responding to data inquiries, requests to delete personal data, and requests not to share or sell personal data.

Building trust with customers is crucial to the success of any organization. By maintaining a consistent message across all channels, the organization fosters customer loyalty and repeat business. For organizations, CPM solutions ensure that the organization has each customer’s explicit consent to use personal data and send physical or digital communications. For customers, the solutions’ interfaces provide an easy mechanism for changes to preferences and authorization.

Building trust with customers is an ongoing process that requires consistency and a commitment to customer satisfaction. Trust takes time to build, but can be lost quickly if not carefully maintained. As such, consent and preference management acts as one part of an overall CCM strategy designed to build long-term relationships with customers through effective and personalized communications.

For more details about balancing personalization and privacy in customer communications and the current landscape of cloud-based CPM solutions, Madison Advisors’ complimentary research brief, “Consent and Preference Management,” can be downloaded here.