Free DownloadWhat is customer experience management (CEM or CXM)?
Positive customer experiences can boost both a company’s reputation and bottom line, but negative ones can have the opposite effect. Crafting and implementing a customer experience management strategy is essential. This guide explores techniques and tools that can help organizations construct and implement an effective customer experience management plan.
7 ways to collect customer data that keep you compliant
Customer data can improve CX, marketing and sales decisions, but organizations must collect it transparently, protect it and follow applicable privacy laws.
Making decisions based on customer data can help customer experience teams understand market trends, customer needs and pain points that affect the customer experience.
One challenge in customer data collection is ensuring that the methods and types of data collected comply with applicable privacy laws, industry requirements and internal data governance policies. The best-known example is the European Union's GDPR, but organizations might also need to account for U.S. state privacy laws, such as the California Consumer Privacy Act (CCPA) and California Privacy Rights Act, Virginia Consumer Data Protection Act and Colorado Privacy Act, among others.
Privacy requirements do not prevent organizations from collecting useful customer data. However, they do require organizations to be transparent with customers, collect only what they need, protect the data they collect and give customers appropriate notice, choice and control.
Learn about seven ways to collect customer data while reducing privacy and compliance risk.
1. Customer surveys
Perhaps the best way to stay compliant is to conduct no-obligation surveys throughout the customer journey. Plenty of customers are willing to share their opinions on purchase decisions, product and service fulfillment procedures and other feedback that CX teams can combine with other surveys. Then, teams can analyze the data to better plan their marketing strategies and sales tactics, and to streamline problematic processes.
Data collected from sales at the point of sale is known as transactional data, which can include transaction dates, times, locations, products or services purchased, purchase history and payment methods.
Then, CX teams can use this data to determine the following:
Success or failure of a particular marketing campaign.
Shopping trends.
Potential campaigns that might be successful in the future.
The likelihood of a customer returning.
To reduce compliance risk when collecting transactional data, CX teams should collect only the information they need for a specific business purpose and avoid storing unnecessary personal or payment details. When possible, organizations should aggregate, anonymize or de-identify transactional data before using it for analysis. They should also limit access to the data and protect it according to internal security and privacy policies.
Many customer data collection methods, such as cookies, website tracking, CRM data and social media analytics, require clear disclosure and appropriate privacy controls.
3. Web tracking
Organizations that conduct business over websites can collect and analyze data using a number of tracking tools. Understanding how customers interact with a website can highlight what customers want, so CX teams can refine the website layout, content and purchasing methods to better attract prospects and cut down on cart abandonment rates.
Businesses should be careful about what website data they collect and whether the data falls under privacy laws such as GDPR, CCPA or other state privacy laws. In many cases, websites that use cookies, pixels or similar tracking technologies must disclose those practices and give users appropriate notice and choices before collecting or sharing certain types of data.
4. Opt-in digital newsletters and blogs
Many organizations stay in the minds of customers because they offer digital newsletters and walled blog content that use an opt-in, opt-out process. These methods benefit both businesses and customers, as they offer useful information, discounts and other incentives to customers while providing a wealth of user data for the business.
In many cases, customers are willing to provide their information if the content or discounts entice them. From a business perspective, the newsletters, blogs and other related incentives are worth the time and money spent to engage a loyal customer base.
5. Social media
Social media can help brands engage and interact with existing and prospective customers. Popular platforms such as LinkedIn, Facebook, Twitter and Instagram offer businesses built-in analytics tools and often provide a near-real-time view of customer sentiment and an audience's continuously evolving interests.
Alternatively, CX teams can extract the data, place it into third-party tools and combine it with other forms of collected information for deeper inspection. When teams extract data from social media platforms, they must understand the business is responsible for keeping it safe and removing personal information that may lead to noncompliance.
6. CRM data
Most organizations rely on CRM tools to help track interactions with current or future customers. CX teams must take great care to protect CRM databases, as they contain customers' personal information, including names, email addresses and phone numbers. These systems also store descriptive, qualitative and quantitative data, which helps visualize and quantify customer behavior and lifetime value estimates.
The key to compliance is not only to request customer consent when required, but also to explain what data is collected, why it is collected and how it will be used.
7. Chatbots
As long as users grant consent and an organization's reasons for collecting the data are transparent, chatbots can help businesses focus on the types of questions, concerns and problems that customers may experience.
Whether a user requests specific information about a product or has questions or complaints regarding a pre- and post-sale experience, CX teams can use these data points to get either a high-level or granular view of what the customer wants.
Customer data collection compliance checklist
Before collecting customer data, organizations should answer several questions:
✓ What business purpose does this data support?
✓ Is the organization collecting only the data it needs?
✓ Has the organization disclosed the collection method clearly?
✓ Does the customer need to provide consent or receive an opt-out option?
✓ Is the data protected, access-controlled and retained only as long as necessary?
✓ Can the organization honor customer privacy rights, such as access, deletion, correction or opt-out requests?
✓ Are third-party tools, analytics platforms and AI services covered by appropriate privacy and security reviews?
This checklist does not replace legal review, but it can help CX, marketing, IT and security teams identify privacy issues before customer data collection begins.
Consent, transparency are key
The key to compliance is not only to request customer consent when required, but also to explain what data is collected, why it is collected, how it will be used and how customers can exercise their privacy rights.
Organizations should also practice data minimization by collecting only the data they need for a specific purpose and retaining it only as long as necessary. Digital tools and AI-backed services can help organize, deduplicate, classify and remove personal information, but companies remain responsible for making sure those tools are used safely and in accordance with applicable privacy requirements.
Editor's note: This article was updated to improve clarity and include current customer data privacy and compliance considerations.
Andrew Froehlich is founder of InfraMomentum, an enterprise IT research and analyst firm, and president of West Gate Networks, an IT consulting company. He has been involved in enterprise IT for more than 20 years.
