Have you ever wondered why people adopt preference management? Who first had the idea that the customer might have good feedback? What made this trend of listening to customers grow to where it is today?
There are five distinct reasons that companies adopt preference management. These specific Key Performance Indicators are the ultimate driver for implementation, yes. But they also help justify continuing the system once you start. Most people agree that all five of these KPIs are important. Even so, one in particular is usually the deciding factor to start collecting customer preferences. That “most important” factor may change for each company. But since we consider them all to be important, we’ll discuss them in this five-part series.
These KPIs fall into one of five categories – this series of blogs will discuss them in more depth.
KPI #5 – Mitigate compliance risks
Most companies that have issues with compliance do so because they don’t have proper processes. They do not focus on compliance across their organization. They may be storing customer data and customer preferences in systems that are hard to access. They may be contacting customers after the customer has requested to be opted out. Focusing on building better compliance processes gives companies peace of mind. It allows them to approach more progressive communication policies across their organization.
This is more important than ever with regulations such as TCPA, CASL and GDPR. The ePrivacy regulation is right around the corner. There’s exposure to massive fines and negative publicity. The complexity of all regulations is increasing. You can no longer assume everything will be fine. This isn’t a check-box on your list of requirements for your ESP. It’s an organization-wide system and process. For example, let’s say you receive an inquiry from a governing body related to GDPR. You have no more than 30 days to respond with requested customer information. What if that data is stored in databases across your organization, and isn’t centralized? That deadline will be nearly impossible to accommodate.
It’s easy to justify the budget for the effort. Consider possible fines and loss of time for defending claims. Consider also protection against litigious consumers and consumer groups. For example, the penalties for violating GDPR are as high as $20M euros or 4% of total global revenue. This particular metric is based more around avoidance of massive fines and litigation. You won’t find budgetary cost-savings as cut and dry. However, don’t let that deter your efforts. Regulatory compliance is incredible important.
Unfortunately, we’re often contacted by a new customer only after they’ve run into noncompliance fines and litigation. Consumer privacy regulations are getting more stringent and complex, not less. Don’t wait until your company is facing a massive financial penalty – the more proactive you are, the better. The smartest way to plan is to build your systems with privacy by design. That means the process was designed with privacy in mind. In other words, Privacy protections haven’t been added on later as a bandage to a problem.
Whatever your company’s primary reason for considering a preference management system, we understand there can be many other potential drivers as well – and sometimes, different business units within a company consider the “primary” driver to be different. Not everyone agrees on one specific KPI as being the most important. We hope this blog series has been helpful in justifying your preference management initiative.
Don’t miss the previous parts of this series:
KPI #1 – Preventing loss of customers
KPI #2 – Reducing costs
KPI #3 – Boosting revenues
KPI #4 – Centralize preference collection and availability