Customer Data Ethics that SaaS Companies Need to Follow in 2021

SaaS, or Software-as-a-Service companies, are rapidly being associated with cyber data breaches. As data has proven to be the backbone of the service and customer-driven industries, organizations are required to follow data security protocols to build customer relationships and develop trust. 

With the rise of General Data Protection Regulation (GDPR), consumers are in charge of their data, its usage and how it is captured. Consumers can even hold organizations responsible for any data mishaps, especially when appropriate steps were not followed to maintain, and prevent data breaches. 

Since SaaS organizations are rapidly taking over from traditional software models, it’s important to respect and obey the rules and regulations laid down towards correct data management. Failure to do so might create unwanted situations for customers and organizations, as confidential data gets leaked on the Dark Web. 

This article will talk about the various trends involved in Ethical data marketing, data handling, and the need for encrypting confidential customer data. 

Ethical use of data and the rise of data in marketing campaigns

Digital Transformation has opened up a gateway to a different dimension, which is filled with plenty of market opportunities and ethical challenges, especially with respect to marketing campaigns. 

Customers’ data is used for a series of purposes, some of which include: 

• lead generation
• understanding customers behaviors
• mobile marketing
• targeted advertising
• customer segmentation
• passive data collection
• marketing campaign designing
• customer service and conceptualizing customer loyalty programs

Customer trust is a volatile concept, and it needs to be dealt with utmost precision. As data breaches become a common feature with organizations, customers are becoming vary about how their data is collected, stored, and used within different organizational processes. 

The pertinent question worth pondering over is, “To what extent can companies go to collect this valuable customer information?” Even though policies like GDPR and California Consumer Protection Act (CCPA) are protecting consumer information, the adoption of ethical data collection and handling is yet another milestone to be achieved.

Gartner predicts that customer data ethics will take on new dimensions in marketing campaigns as companies will struggle to win back the trust of its customers. However, due to immense competition, organizations tend to outweigh customer data ethics and rather use it for marketing capabilities such as:

Real-time marketing: Real-time marketing, as the name suggests, refers to an organization’s capabilities to meet real-time demands of customers, within a short span of time. Such organizations are often able to convert customers readily and beat the competition by maintaining customer loyalty. Such measures can be performed through the use of real-time marketing tools and techniques. 

Personalization tokens: Personalization tokens are an excellent way of improved email marketing so that the end-users feel the emails are customized for them. This way, not only does the email capture the reader’s attention but also enhances their willingness to go through the mail.

However, the buck doesn’t stop with just personalized tokens. Through the use of dynamic content, an organization can even determine the content a user sees within the email. This is how targeted marketing reaches an all-new level, all in the due course of time with personalization tokens. 

• Location-driven campaigns: With the use of location-driven marketing campaigns, organizations can target consumers through the use of online/offline messaging services. A good example of location-driven marketing is by alerting customers to pick up a certain product which is available at a nearby store. Such techniques include the likes of Geotargeting, Geofencing, Beaconing, Mobile Targeting and Geo-conquesting.

• Demographics-based advertising: Different people, from different demographics, often have different needs. One size does not fit all; through tailor-made marketing, organizations need to segregate their customer base and devise the correct marketing tactics. Segmented marketing, which is done as per different demographical sections, aims at designing marketing campaigns for different age groups, customer needs, and other relevant parameters, as the case might be. 

Marketing is of utmost importance; however, in the quest to maintain their customer base, organizations often tend to overlook some important factors pertaining to data security. 

Some common examples can be explained with respect to the following points:

• WhatsApp privacy issue: With WhatsApp’s recent privacy policy changes, a lot of Indian users suddenly began to migrate to Signal and Telegram, WhatsApp’s immediate competitors. Was this a marketing glitch, which gave an inkling into the disastrous data handling capabilities of WhatsApp/Facebook? Despite the flailing attempts made by WhatsApp to cover their data handling goof-ups, customer trust levels have taken a nosedive, and there does not seem to be a way out for WhatsApp to get out of this anytime soon. 

• TikTok: TikTok is yet another glowing example of a data harvesting scheme gone wrong. The Chinese app is not far away from being the butt of controversy, with respect to privacy rules and how they manage and collect customer/user data. Given the app’s recent hacks, a lot of Federal Agencies in the US have begun keeping tabs on the usage of this app and its strategies for data collecting, storing and handling. 

Managing customer data using transparent data encryption framework

Encryption is an excellent way to ensure personal customer data is safe and secure so that even hackers can’t breach system walls, with an intention to misuse the data. 

Transparent Data Encryption (TDE) allows organizations to encrypt sensitive data, which can further be stored in databases. This encrypted data can be decrypted in a real-time manner, by people who have the right levels of access and appropriate decryption keys. 

Some benefits of this system include:

• Sensitive personal, customer data can be encrypted, to remain compliant with the security-related regulatory compliance policies laid down by federal agencies
• Additionally, database users can access such data seamlessly, without ever realizing the data is encrypted securely
• Hackers won’t be able to get access, without having the right level of access beforehand
• Data encryption with minimal to zero downtime further enabled on production systems

5 steps to build ethical customer data practice in 2021

With the advent of 2021, there is a lot of focus on ensuring the right rules and regulations are laid down around data ethics. In order to prevent data breaches, it’s important for SaaS organizations to be able to safeguard confidential data. 

In order to make the most of this process, organizations need to follow these 5 steps, to weave the data security fabric, enriched with the right data ethics and safe data handling practices. 

• Ethical data Collection:

Customer data collection is an ongoing process; however, this does not mean you can totally negate the ethics involved in the process of data collection. One of the best ways to remain compliant is by remaining transparent with customers, through the use of surveys. This methodology provides customers with an option to choose what they want to share and what they don’t want to. Instead of organizations, the customers should be in control of the data they share in the end. 

• Security is of utmost importance:

Simply put, there is no way you can overlook the importance of data security. The consequences of not giving full priority to data can lead to heavy fines for organizations and customers alike, which can be in the form of security breaches and loss of financial information.

• Cleanse and remove unwanted customer data:

On a day-to-day basis, organizations tend to collect a lot of data; some of this data is relevant, while some are not. As a part of the data retention policies, it’s important to validate the veracity of the data and delete what’s irrelevant. Clean, accurate data can help make good decisions, and deleting unwanted, irrelevant data promotes ethical data handling skills. 

• Ask for permission:

As a part of the new data policies, especially post the launch of GDPR and CCPA, customers have been put at the forefront and at every stage of data collection, an organization needs to ask for customer’s permission. This can be in the form of website cookies, or via the process of offering data privacy settings to the end-users. 

• Back up all data:

Data recovery is an important aspect of data handling, and it is important to securely back up all possible sources of data, to avoid any security breaches. There are a series of data recovery options available for organizations; use the most ethical form to avoid unnecessary data breaches. 

Conclusion

Using a SaaS model against traditional software might have become the norm, but it has brought in a series of issues, which can’t be taken lightly. Disregarding data’s security and privacy, data collection policies, data handling, data cleansing, and moreover, data transparency can harm an organization’s credibility. Subsequently, this leads to customers losing trust in an organization’s ability to effectively use confidential data, which is going to be extremely harmful in the long run. 

In order to keep hackers at bay, while securing data sources, organizations need to comply with the data collection regimes, which have been laid down to cater to protect customers from any illicit effects of data breaches.