Sep 19, 2018
How GDPR Affects the Customer Communications Experience
GDPR has resulted in a multitude of changes and challenges for financial institutions around the globe — not only in the EU. Any organization with business interests in the EU must rethink how they collect and use personal data. Under GDPR, a business must have the customer’s consent to leverage their data in any way.
by James Brown, CEO, Smart Communications
There’s been a great deal of discussion about how GDPR impacts businesses, and what it means for customers and their experience. Here are two ways these regulations affect customer experience and communications.
Smaller data sets = higher quality communications
While there are many alarms sounding over GDPR, benefits do exist. Compliance creates the opportunity for finance companies to improve their customer data accuracy since the threshold for collection has increased. This results in more accurate data from customers who actively opt-in to receiving communications. Since a key part of the equation for compliance is to re-engage customers for consent to use their data, organizations will now get a better sense for who’s opting in and out. This will deliver more accurate information about the company’s customer base and allows for a better customer experience thanks to more personalized, effective communications.
Today’s savvy customers demand more authentic experiences. Finance companies are noting this trend, and there are plenty of studies to back it up. Document Strategy found that 64 percent of global service providers see customer communications and the customer experience associated with personalized communications as one of the most important current business trends. In addition, 84 percent of organizations who actively work to improve the customer experience by building better individual relationships with customers see revenue growth.
GDPR compliance is an undoubtedly complicated task. But it gives businesses — especially financial institutions — the chance to create more nuanced communications by embracing trust, transparency and an understanding of respective customer bases. This all leads to a better overall customer experience.
Pull tactics, trust and personalization
Customer communications tactics can often be divided into two categories: “push” and “pull.” Push strategies like email, SMS and direct physical mail are currently the most popular. While these methods have shown great success since their inception, it’s possible that we’ll soon see a shift towards a ‘pull’-based dynamic, thanks to the rise of GDPR.
Pull tactics involve motivating customers to actively seek out businesses on their own. Studies show that a growing number of people want to receive more pull-based communications from companies. Interestingly, GDPR is a catalyst for this trend. Looking ahead, financial institutions will need to adopt new methods of personalization in communications to encourage new and existing customers to opt-in and give consent to use their information and preferences.
Fostering trust through pull tactics to facilitate opt-ins will become even more effective tactic for scaling customer communications post-GDPR. In fact, a recent survey found that 78 percent of customers are more likely to engage with a business and opt-in when they know they’ll retain control over how an organization communicates with them. With the threshold for opt-ins and personalization on the rise in the GDPR era, businesses are forced to rethink their entire approach to customer communications. For this reason, we’ll see pull tactics move to the forefront of the company’s communications frameworks.
Thanks to customer desires for greater control over how companies communicate with them digitally, organizations will look to GDPR as an impetus for greater improvement in customer engagement. And since it affects every organization that handles customer data, companies will use these regulations to further build trust with customers and boost engagement.
