Out-Law / Your Daily Need-To-Know

Businesses urged to explain the benefits of consumer data collection, says marketing body

27 Sep 2016, 2:28 pm

Businesses should explain to consumers the benefits they can derive from allowing their personal data to be collected if they want to obtain greater "buy-in" to personalised marketing, an industry body has said.

The Chartered Institute of Marketing (CIM) provided the recommendation after a survey it carried out found that just 8% of consumers "understand where and how organisations user their personal data". According to the CIM, 45% of the 2,245 UK adult respondents to the survey said they would "stop using an organisation altogether if they found out they were using their personal data in a way they didn't feel comfortable about".

"Privacy concerns … are driving decision-making around the very brands people choose to shop with," the CIM said in a report citing the results of its survey.

The CIM urged companies promoting goods and services to "start putting consumers at the heart of their thinking" to help obtain their "lasting engagement and trust".

It said: "We found that authentic customer engagement is something that many marketers talk about, but don't deliver, when it comes to data. So much so that many marketers are dubious about releasing their own data as consumers."

"If organisations don't start explaining what they want the data for, what they're doing with it and the benefits of sharing – as well as providing tried-and-tested reassurance – then there is really no reason for consumers to share it at all," the CIM said. "Brands that use actionable, permission-based data to provide personalised, relevant offers will build longer-lasting customer relationships."

The Digital Economy Bill, laid before the UK's parliament in July, would introduce a new obligation on the UK's information commissioner to set out a code of practice to regulate direct marketing activities. The Information Commissioner's Office (ICO) published new guidance on direct marketing earlier this year.

In the guidance the ICO said businesses should not promote products or services to consumers whose contact details they have bought from another company until they have checked that the seller obtained appropriate consent for such marketing activity.