Ethical Data Collection Norms for Companies’ Long-term Success

“83% of customers think retailers need to offer more authentic shopping experiences” (source: Consumer Behavior Stats)

In this age of personalization and providing authentic shopping experiences, data is the crucial element. To meet business goals and deliver a great customer experience, brands collect customer data in a multitude of ways to design and deliver great shopping experiences. Further, wearable devices and smart products connected over the internet are helping brands to stay closer to their customers in day-to-day activities. Getting a 360-degree view of customers’ behavior & needs, helps brands provide the customers with what they want and how they want.

With collecting data in various ways becoming easier and cheaper, brands can gather a lot of data. But to design and deliver meaningful marketing campaigns, the quality of data and consent of the end user is ultra critical. Customers share their data for rewards and benefits but as a brand, the loyalty and engagement journey begins there. Many times, brands just collect data and start mass marketing but this is where brands need to align their customer data collection policies & maintain data ethics to keep their brand reputation intact. In this blog, we will discuss how brands can build ethical data-use programs and the ways in which ethical AI is supporting data security endeavors. 

Why do Brands Need an Ethical Data Collection Policy? 

As Google announced the elimination of tracking cookies from its Chrome browser in 2023, many businesses were panic-stricken for obvious reasons. Gradually, web browsers will be restricting user data collection through third-party cookies. Gathering consumer data in a cookieless world, will not be as easy as it was earlier. Now, customers are becoming cautious about sharing their personal information. And, to maintain customer privacy, more and more businesses are migrating from third-party data collection to zero-party data policies. Talking about zero-party data, it’s the data explicitly shared by customers to get more personalized experiences with the brand’s offerings. 

Theft is a serious situation be it of physical goods or data. Though several data privacy laws & data protection norms like European Union’s GDPR are in place, their righteous execution at the organizational level makes the actual difference. To align your brand’s customer data collection policies, ask yourself a handful of questions: 

• What is the intent of gathering the data that you are collecting? 
• How minimal data you collect can serve the purpose? 
• Is it sensitive data & does it expose any liability? 
• Would it cause any harm, if the data you are collecting goes into the wrong hands? 

Getting answers here helps companies take a deeper look into their existing data collection practices. Since first-party & zero-party data is more accurate, it helps marketers optimize the budget and amplifies customer experience as well. Hence, it’s a win-win for brands as well as customers.  

Bring Long-Term Success with Data Protection Policy 

Even when there are set government regulations to guard customers’ data, companies are getting ever-increasing pressure to use it responsibly. A formalized ethical customer data protection policy supports brands in keeping data privacy uptight at an organizational level. To design & implement customer data use policies, companies can take a strategic approach.  

The first and foremost thing is to align the company’s vision & mission for a clear view of the values. Ideally, you can set up a data ethics board at your organization led by Chief Information Security Officer (CISO) involving product designers, a leadership team, and data analysts for data risk evaluation. Define data governance standards to set the purpose of data collection and take ownership of the risks involved. Further, align all the norms under a customer-centric approach. Maintain transparency with your customers by timely communicating policy rollouts with them. 

Top 3 Ethical Data Collection Practices

1. Take consent –

   Unless you find a clear YES, it is NO! Explicit consent of the information provided to use given information for marketing and other purposes is very much required. As data collectors, you must define the objectives of gathering all the data & evaluate its usage upfront as you gather data.

2. Maintain confidentiality –

   Anonymize data specific to individuals and keep it confidential as much as possible. Such norms specifically apply to companies dealing in the medical sector or service providers of government agencies. There is no 100% hackproof system and that’s why brands must anonymize identity.

3. Communicate policy updates to customers –

   Whether it’s the situation of a cyber attack or any small addition to privacy policies, clear communication to the users is important to build trust. Create customer awareness about data collection policies as well as malicious data usage practices to let them have a clear idea of the risks involved. 

Leverage Ethical Data Collection with AI 

You may say that AI is already driving marketing, as even the simplest sort of personalization doesn’t happen on its own! We agree with it. And, that’s why we talk about ethical AI. AI-based processes follow mere algorithms designed to serve the purpose of personalization in marketing. Now, ethical AI is amended in AI frameworks to solve the common challenges of current AI usage to support ethical data collection practices. 

It’s often a case that AI self-enforces the options. Let’s consider a hypothetical case, where a guy named Zuber uses an insurance app – X. He has been searching about multiple insurance coverages and he supported a post or two for a breast cancer campaign on socials. Now, per the cookies collected from Zuber’s browser history and AI algorithms, his profile is disproportionately bombarded with cancer coverage plans – and this cycle continues to the extent of personalized push notifications. That’s when Zuber was unable to find a reason behind this and even decided to uninstall the app.

That’s exactly where ethical AI addresses such shortcomings of the algorithms. It maintains transparency among customers and lets users give permission for data usage. Using first-party & zero-party data, with more targeted customer interactions, brands can interrupt the self-reinforcing cycle. In the above case, if X app would’ve used only the data fed by Zuber or enquired him for interest in the insurance plans, he wouldn’t have uninstalled the app. Ethical AI data collection practices can improve customer engagement rates & aid in maximizing business outcomes.

Wrapping Up

Adapting ethical data collection practices, implementing ethical AI, and maintaining data ethics in an organization is its functional need. There is no fixed set of rules that can help you earn the trust of your customers. 

As a brand, you need to maintain transparency with your customers & keep updating your policies as the market norms of data security change. Needless to mention, keep your customers posted on the updated privacy norms & increase awareness around the importance of data security. 

At Capillary, we have had data security measures intact from day one. We have a dedicated team that constantly audits data across all our platforms & maintains transparency with the clients. We have partnered with firms like Trend Micro to enable deep security and data privacy for our customers. Looking to implement a modern CDP for your brand? Get in touch!

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Writer by profession & an artist by passion. Aprajeeta spends most of her days writing the tales of brands and those of her imagination. In odd hours you find her reading literature & diving deeper into ecommerce sciences. Art fuels her creativity & she adores experimenting with it.