Personalization vs privacy: Can CIOs strike the balance?

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CIOs must not think of the privacy debate as personalization versus privacy, but rather as personalization with privacy in mind.

Organizations today face an important task to strike a balance between providing personalized, relevant experiences while respecting consumer privacy and user choice.

Personalization has become the norm in so many industries, so there is a level of expectation from consumers that the companies they interact with will be able to offer them a tailored experience. However, the mindset of the consumer has shifted; they are now more conscious of providing their data for “free” for a more personalized experience. That personalized experience or offer may not cost them financially, but consumers are increasingly wary of how their data is being used.

Awareness has been stepped up further as a result of privacy regulations such as the EU’s General Data Protection Regulation (GDPR). Consent, opt-in, and trust are very much front of mind.

CIOs and digital leaders are having to adjust the way they provide personalized offers, to take into account privacy from the outset.

With that in mind, CIOs and digital leaders are having to adjust the way they provide personalized offers, to take into account privacy from the outset. It is this exact method which Sweden’s IKEA, part of the Ingka Group, is using, by implementing Privacy by Design.

“It’s time to have a win-win relationship for people and companies around their data and give control back to the many people,” says Barbara Martin Coppola, Chief Digital Officer for Ingka Group.

“We will completely change the way we collect, view, and manage data. Data is embedded into everything we do within the company. To live up to our bold ambition, we need to redesign and rethink everything through the lenses of data ethics,” she adds.

This privacy-centric approach doesn’t mean that companies can’t personalize the experience for consumers. Instead, it’s about giving more control to consumers, to help them feel empowered.

“The key to ensuring you have happy and loyal customers is not to think of the privacy debate as personalization versus privacy, but as personalization with privacy in mind,” says PA Consulting privacy analyst Sharad Patel.

They can choose, for instance, when using the IKEA app, whether they want to use it privately, and whether browsing history and purchase history are collected and used to tailor what they see. This gives them choice around their data and makes privacy central to their experience. The Ingka Group is just one of many businesses tying in privacy to personalization, in order to create a competitive edge over rivals.

“Only companies which can find this right balance between personalization and privacy will be successful in the future,” argues Patel.

“Too much of either would risk either being ignored by the customer (if there is no or very little personalization), or losing their trust (if there is no or very little privacy), both of which could have disastrous consequences on your business,” he adds.

But in order to make this work effectively, there has to be a company-wide program and ethos.

“It is everyone in the organization’s responsibility to treat data responsibly and with respect,” says Michael Plimsoll, senior industry strategist at Adobe.

For CIOs and other data leaders, this means educating internal stakeholders about the importance of personalization with privacy in mind, but also building customer trust by offering them choice and control of how, when, and where their data is used. It’s here that CIOs can benefit by working with established brands which have privacy and security in their DNA, and which offer data platforms that offer a rich view of the customer, with privacy at the forefront.

By focusing on putting the user first, organizations can help ensure that the privacy options they’re offering consumers on the front-end are replicated on the back-end, and throughout the business – and also build more favorable and trusted customer relationships in the long run.