As the compliance deadline for the European Union’s General Data Protection Rule (GDPR) approaches on May 25, companies are working hard to assemble the processes and technology they'll need to comply with the law’s directives.
If your business is operating in Europe or collecting data from European customers, GDPR is a mandatory; you’ll need to have data protections in place when the provisions of the law take effect.
For some companies, this is causing anxiety about the protections mandated by the law and the steep penalties for non-compliance.
However, the looming GDPR deadline actually presents an opportunity for U.S. businesses that don’t yet operate in the E.U.; by modeling your privacy controls off GDPR standards, you can rise above the competition by complying with the strongest privacy protection laws currently on the books.
This will provide your organization with important benefits, like:
- Building trust with consumers by adopting the processes and standards that form the world’s most comprehensive consumer data protections
- Opening up your businesses for E.U. markets
- Better understanding your customers’ preferences and behaviors
In the era of the Cambridge Analytica/Facebook scandal and rampant identity theft, consumer trust is an increasingly rare and valuable commodity.
Consumers are demanding more and more accountability from companies for how their information is collected and used. According to the Pew Research Center, over 80% of U.S. adult social media users are concerned about advertisers and businesses accessing their data (and that was before the Cambridge Analytica story broke.)
Smart businesses will see this as an opportunity — companies that are able to build and demonstrate strong privacy protections for their customers will have an advantage over those that do not.
Currently, U.S. privacy laws lack many of the controls and customer rights that are included in GDPR. (And with the current political situation, U.S. consumer privacy protections are unlikely to be amended for some time.) By aspiring to E.U. data protection standards, you can competitively differentiate your company and earn customers’ trust.
Accessing E.U. Markets
In the past few years, many U.S. companies have opted to avoid doing business with E.U. customers entirely, due to the difficulty of complying with Safe Harbor privacy principles (the GDPR’s predecessor).
While many of the protections of Safe Harbor are similar to GDPR, there is one crucial difference: the old law was merely an E.U. directive versus an E.U. regulation.
Under E.U. law, directives mandate a general policy at a high level, but it is up to each member state to establish local regulations and processes. This means that under Safe Harbor laws, U.S. businesses intending to use E.U. customer data had to either set up model clause agreements with each E.U. member state or establish an separate E.U. operation that kept all E.U. data completely insulated within the E.U.
Since GDPR is an E.U. regulation, the rights and principles of the law are identical across all E.U. countries, and only one agreement needs to be established to conduct business (e.g. Privacy Shield). This greatly reduces the compliance burden and the cost of setting up data operations for U.S. businesses.
Building Better Customer Experiences
For a long time, many U.S. businesses have fallen into the trap of “bigger marketing is better marketing.” They assume that a wide net that includes every customer will gain more brand awareness and positively shift behaviors.
In reality, targeting experiences at users that are not receptive can be worse than not marketing to them at all. It can actually be damaging to your reputation and brand to over-communicate, or communicate the wrong message.
Some of the components of GDPR compliance, though, are the same building blocks you would need to create a great customer experience program — namely, recognizing your users and providing them with the right experiences according to their opts and interests.
GDPR mandates that businesses be clear about how customer data is going to be used, and that they collect explicit permission from the customer for each planned usage of that data. Get these pieces right, and your customers will thank you for it; by adhering to GDPR, you're enabling your organization to collect the data points it needs not only to protect customer privacy, but also to provide more personalized messaging.
Don’t be daunted by getting set up for GDPR — the law itself is written in clear and comprehensible language (ahem HIPAA…) and there are many resources out there to help in getting started, including:
- Official E.U. GDPR site
- Privacy Shield Site (E.U. sanctioned, U.S. Dept. of Commerce program for U.S. businesses to handle E.U. data)
- Hubspot’s great GDPR checklist
As customer concern about data privacy increases, treating the new E.U. laws as an opportunity, rather than a barrier, will likely bring your company great rewards.
Still have questions about GDPR, privacy, and data? Drop us a line.