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Data Terms and Insights: Navigating Customer Consent
Now that you have a better understanding of the distinct characteristics of data, datasets, and databases and how they relate to intellectual property ownership, let’s define three main types of data and the learnings that can be gathered to understand the customer and improve business engagement.
Individual data focuses on the behavior, habits, and preferences of individual people.
This includes what type of media they watch, where they are located, and who they interact with. These insights can help businesses personalize communications, which can lead to additional engagement.
It's important to note that despite owning the rights to your data insights as a business, ownership of personal data always belongs to the consumer and can only be used with their consent.
In order to obtain consumer consent, transparent privacy policies must be drafted in compliance with various state and federal laws, informing the consumer as to why you are collecting their data and how you intend to go about storing, managing, and using such information.
Identifying critical data
Additionally, as customers become more privacy conscious and data breaches continue to make headlines, it is wise for businesses to focus their efforts on only collecting data required to engage their services.
The first question to consider should be – what data is critical to the business?
Followed closely by – what data is unnecessary?
Minimizing the amount of data collected can be highly advantageous for numerous reasons:
- It builds trust within the community by demonstrating that you have respect for your customer’s privacy.
- It reduces risk of exposure to a data breach, which can cause both financial and reputational harm.
- It emulates compliance with privacy laws, which exist to protect personal data.
It may be tempting to collect as much data as possible in order to maximize on the potential insights gained. However, when data is collected frivolously, it is likely to do more harm than good.
Community data deals with groups of people, aggregating individual data to draw larger conclusions. The goal is to find and take advantage of patterns that hold true for the group as a whole. These insights are based around what you know about the community as opposed to who you know within the community.
Community data can identify trends across populations and geographic areas to more clearly understand the unique needs, challenges, and resources in each community. This can be utilized in the social services and industry as well as other industries who are focused on selling products and services.
Additional consent for the usage of data
Similar to dealings with individual data, community data provides crucial insight into how businesses can successfully reach target audiences. However, by that same token, consumer consent must first be procured.
If your business intends to utilize community data, you must first seek consent from individual users to repurpose their data.
As an example, consider a business that uses a contact tracing app to collect personal data – over time, they realize that the community data collected from a certain subset of their users could be used to market healthcare products and services to those same individuals. Despite receiving prior consumer consent to collect their personal data for app usage purposes, additional consent must be obtained to acknowledge the repurposing of their data – in this case, for the purpose of selling information to a healthcare product company.
Yet again, transparent and honest privacy policies come into play, serving a key role in consumer satisfaction and acquiring consent.
Anonymized data is data in which the ability to identify individuals has been completely removed. Whereas community data looks at many individuals, anonymized data has been modified to the point where individuals cannot be distinguished.
True anonymization is difficult to achieve in reality, considering re-identification can be accomplished through cross-referencing anonymous data with publicly-available auxiliary information
Nevertheless, this type of data still allows users to draw useful large-scale conclusions, but has the advantage of being exempt from many consumer protection privacy laws.
Understanding regional laws and exceptions
Take for example, the laws that apply to de-identified data usage in healthcare. As a way of anonymizing data, de-identifying data strips the data of all personal identification markers.
Normally, consent would still be required from the individual under state laws. However, in some instances under the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), de-identified data can be used without limitations. This is one situation where federal laws can override state laws.
When it comes to dealing with anonymized data, both state and federal laws must be considered. Furthermore, if your business’ data collection and usage extends internationally, each country’s privacy policies must be taken into account as well.
Bridging the gap in consumer trust
Regardless of the data form, privacy considerations should remain a top priority. Customer skepticism of consent to data collection across 3rd party apps and sites continues to rise. Therefore creating privacy policies that contain clear, concise, and honest communications is of utmost importance. Only policies containing full transparency and straightforward intent can acquire and maintain consumer trust.
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