By Richard Huff
With the growth in digital customer interactions, organizations have seen an exponential growth in customer data volume, especially during the pandemic as more customers adopted multiple digital channels for purchasing goods and services. Among the varied data are customer-chosen preferences and consent to contact, which is often distributed across numerous back-office applications with no defined path for utilizing those preferences in a collaborative way across the organization.
The proper management of customer data is critical to providing a good customer experience and meeting various state and regional regulations for data privacy. The General Data Protection Regulation (GDPR) is the European Union’s regulation for data protection and privacy. Although the U.S. lacks a national regulation, the California Consumer Privacy Act (CCPA) was enacted in 2018 and is a model for other states. A key aspect of both these examples is that the regulations designate the rights of any person living in its jurisdiction and must be followed by enterprises with customers in that jurisdiction. As a result, enterprises with a global customer base must meet overlapping global regulations for customer data privacy, which requires documentation of how the enterprise collects and manages customer data.
Enterprises presenting clear and unambiguous forms to collect customer consent and detailed customer communications preferences earn their customers’ trust. The more transparent an enterprise is in its data collection process, the more comfortable customers are sharing data. Proper management of customer preferences across all forms of communication allows organizations to present products and services that would be of interest to a customer while hiding those that the customer already has or in which the customer has no interest. For example, a customer with property and life insurance policies with the same company would view life insurance mailers included with the property insurance arm of the organization as irrelevant and wasteful—and possibly annoying.
Madison Advisors has seen strong interest from its enterprise clients in best practices and solutions for customer data management. A survey of these enterprises found that most lacked a centralized customer data repository—a single system responsible for maintaining all customer preferences and consents. While many rely on a customer relationship management (CRM) solution, these fail to account for website and mobile application preferences.
Solutions for consent and preference management (CPM) have been available for many years, but adoption in the U.S. has been slow. Primarily software-as-a-service (SaaS) solutions, the offerings include pre-built application programming interfaces (APIs) with which to extract customer data from common back-office systems, such as CRM systems. The solutions also enable enterprises to build custom APIs to connect to older or less common applications still in use. The CPM solutions record all changes by customers to their consents and preferences regardless of the application or channel used by the customer.
With the passage of new regulations across more geographies and increased use of digital channels for customer communications, the issue of CPM will become more complex. Madison Advisors considers CPM to be an integral component for improved customer experience and expects enterprises that don’t add CPM to an overall CCM/CX strategy to face greater business and legal challenges. Later this fall, Madison Advisors will publish in-depth research on the CPM market and available solutions.
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