How Data Privacy Affects Business Growth
The modern world is data-driven. Consequently, thriving businesses have access to lots of data—financial data, logistic data, employee data, customer data and more. The way a business handles this enormous volume of data is an excellent indicator of success in the modern business landscape. Data privacy simply refers to how your business ensures that it uses the data it collects for the intended and stated purposes and nothing more. It describes the processes which regulate data collection, storage and use within the bounds of a business operation.
Online businesses often use a variety of techniques to collect data from their customers. One of these techniques is browser fingerprinting.
Data collected via these means are important to online businesses, but the collection, use and storage of that information raises privacy concerns. Thus, end users employ different means to prevent giving out their data through those means. This, however, is not good for the affected businesses.
This scenario is one example of how data privacy practices can determine the trajectory of business growth. Good data privacy practices help a business achieve the following:
Establishing and Maintaining Customer Relationships
A 2019 Cisco survey reported that 90% of consumers believed that how their data is handled reflected how they are treated as customers. Customers want to know the types of data they are providing to businesses, how it is used and what happens to it once it’s collected. Collecting data without customer consent backfires.
When consumers give a business their data, it means they trust that business. In return, they demand a high level of ethical practices when it comes to collecting, storing and protecting their data. Therefore, safeguarding your customers’ data is a no-brainer for businesses that want to fulfill their customers’ wishes and thrive.
One way to establish strong relationships with your customers is by proving to them that you care about their privacy. You will build a loyal user base for your services if you can successfully do that.
Gaining a Competitive Advantage
Data privacy is a strategic measure to stay ahead of your competitors. If your business is known to operate with strict data privacy rules, you will easily woo customers to your side. A business earns itself a bad reputation when it suffers from data breaches and security leaks.
Making Wiser Decisions
Poor data privacy and data protection practices can be costly. In many countries, various regulations (like the GDPR, for example) punish businesses that do not implement data privacy practices in their operations.
Also, the threat of data breaches is increasing daily, and small businesses are prime targets of these hacks. According to Verizon, 28% of data breaches reported in 2020 victimized small businesses.
Small businesses, unlike larger companies, cannot quickly muster resources to resolve the problems that arise as a result of breaches. Therefore, it is wiser to implement systems and processes that put data privacy at the core of a business operation.
Improving Internal Processes
When systems and processes that guide data privacy exist, the organization reaps tremendous benefits. Not only will they be able to make better decisions, but they will also make these decisions faster and consistently. The business would be able to take advantage of the data they collect to improve their business operations and, consequently, their customer experience.
Conclusion
The importance of good data privacy practices in a business cannot be overstated. Data privacy sets up a domino effect for modern businesses. It can either lead to tremendous business growth or the downfall of the business.
Businesses that want to thrive in this age of data must make data privacy a core business practice.
