Luxury Institute: Removing the Fear of Building Client Relationships in the Era of Privacy Legislation
NEW YORK, Nov. 05, 2019 (GLOBE NEWSWIRE) -- The California Consumer privacy Act is set to take effect on January 1, 2020. Over 500k businesses in the USA, and many others globally, will now have to comply. Along with GDPR, Europe’s privacy law, the new California law will create new legal parameters for how to conduct business while respecting the privacy rights of individuals. Since privacy laws are inescapable, how are companies that seek to build trusted relationships with prospects and clients expected to behave?
The first step for any legitimate seller of goods and services is to seek the best legal advice and ensure that compliance is 100%. Only a skilled attorney and privacy law team can guide a company to execute the legal requirements. However, brands that seek to stand out from the pack, and that seek to build the most trusted long-term client relationships, should address the new opportunity not only as a legal one, but as a moral, ethical and value-creating set of possibilities for their clients and their brand. Luxury and premium goods and services brands should lead the way.
The research says that legal privacy protections come not a moment too soon for American consumers. A recent survey conducted by SlickText found that a year after the Cambridge Analytica revelations, consumer concerns about data privacy and security have become much stronger. Over 86% of responders are keenly aware that social media apps and platforms such as Facebook and Google share their personal information with third parties. Another 76% of responders say that privacy has become a moderate or significant concern for them while interacting with a brand online. And consumers are taking action. Within a long list of defensive actions, over 51% stated that they unsubscribed from email newsletters, while 36% have unsubscribed from branded text messages. Importantly, 94% of consumers said they are unlikely to choose to do business with a company if they are concerned about their privacy practices, with one third extremely unlikely to do so.
In an effort to develop some best practices in building trusted client relationships for luxury goods and services brands given the inevitability of privacy legislation, the Luxury Institute HQ team reached out to select experts of its Global Luxury Expert Network for key insights on how to go far beyond the requirements of privacy laws. GLEN experts are the best minds in luxury, have a minimum of 12-years of operating experience, and are current and/or former C-level, VP or Director executives at top-tier luxury brands with proven track records of high-performance. Below are some recommendations that GLEN experts believe can give a brand an edge in building client relationships in the new era of privacy legislation:
1. Strictly Follow the Privacy Laws
It must be reiterated that every brand must meticulously follow the letter of the law immediately. Despite what opponents say, in many ways, privacy laws are a precious gift to brands in helping to protect them and their client relationships long-term. Unfortunately, surveys conducted with executives during August 2019 indicate that only 8% are prepared. Whether through an in-house team, outsourced resources, or a combination thereof, businesses need to be able to comply with all facets of the law. For those who fail to comply, fines will begin to stack up. It is the fiduciary obligation of any Founder, Board, and Executive Team to take immediate action to protect the company and the client base.
3. Don’t Sell Customer Data to Third Parties
It may be legal to sell client data to third parties, but that does not mean that a brand should do it. Fortunately, most brands do not depend on this source of revenue as their core business model. The law now states that consumers must opt in for such an action to be legal. But it’s good advice to refrain from doing so based on moral and ethical grounds. Whatever economic advantage it may have generated is miniscule and irrelevant compared to the potential loss of trust and customer-lifetime-value. Create a public policy that your brand will never sell any customer data to any third party, under any circumstances. Communicate it clearly. It will liberate the brand from ever having to ask clients for permission for something that clients now consider a negative and may put the trusted relationship at risk.
4. Do Not Hold Your Clients’ Financial Data Unless You Can Guarantee Its Security
Holding clients’ credit card or bank account data makes a brand a huge target for hackers and fraudsters. Unless a brand can protect the data with military grade cyber-security, it should refrain from holding financial data. Even with military grade security and encryption, brands may want to refrain from holding that precious data to eliminate the risk and liability. Although it presents an inconvenience, most clients will appreciate the wisdom and prudence during a time of major cyber-security risks. Better digital protection solutions are on the way. Until then, a brand may want to hold back on storing financial data.
5. Respect the Client’s Requests For Contacts
Often, when clients opt-in to provide their contact information, they do so with the explicit added request to the sales associate that only that associate be able to contact them directly. The sales associates agree and dutifully enter the data into the company database. But once the contact information is in the customer database, the marketing team, with good intentions, but unintended negative consequences, proceeds to spam the clients, often on a daily basis, with offers that undermine the client-associate relationship. Top-tier associates of luxury brands state that this behavior erodes client trust. Once a brand has the legal consent of the client to contact them, the brand team should go beyond the requirements of the new privacy laws and respect the client’s requests, in order to demonstrate a higher level of trustworthiness. This builds long-term relationships and sales.
6. Leverage Client Referrals Now More Than Ever
The best way to build a loyal client base is to serve clients so well that they are more than willing to refer the brand, either voluntarily, or via a respectful request. With the advent of privacy laws, serving clients so well that they are willing to provide referrals becomes an imperative. Referrals must comply with the law. They are the highest probability of conversion lead that any business can generate. Once your sales associates have acquired the referral contact legally, and ethically, make sure that they are not only truly legally compliant, but, wise and respectful. Referrals are the major source of high-value, high-complexity and high-risk products and services leads. They may become the most important source of business for any premium and luxury goods and services brands due to the new privacy laws.
7. Begin to Pilot Innovative Client Data Sharing Relationships Now
Although it is not obvious, the new data portability mandate of the privacy laws will drive the future of building stronger client relationships. The mandate will enable clients to download their personal data from any goods and services provider, on a timely basis, in a structured manner that is ready to be mined for real-time insights. This will enable personal A.I. to flourish in the near future. It will also, over time, enable the ability to share data between the consumer and their trusted brands. Specifically, consumers will now be able, by consent, to share or sell any of their structured personal rich, relevant data with any provider of goods or services whom they trust to protect their privacy and personalize their offerings. While we are in the nascent, early days of the personal data economy, brands can begin to experiment through pilot projects. By legal consent, brands can begin to request relevant, real-time data from their clients and innovate how to serve their needs and desires with new levels of advanced personalization.
While many executives, lawyers, and IT consultants fail to realize the massive opportunity that privacy legislation triggers, some savvy entrepreneurs, and Luxury Institute, see this as the tipping point in the emergence of the personal data economy. Consumers will control all of their aggregate, real-time personal data in personal clouds, and through trusted fiduciaries, will share, exchange, sell or donate their data assets with trusted brands. With privacy now guaranteed, the personal data economy will flourish over the next decade akin to the way that the invention of electricity spawned unimaginable exponential innovations over time.
First, follow the law. Then, be bold and innovate. For more information on how to go beyond the privacy law to innovate into advanced personalization for clients, please contact the Luxury Institute.
About Luxury Institute and the Global Luxury Expert Network (GLEN)Today, we are the world’s most trusted research, training, and elite business solutions partner for luxury and premium goods and services brands. With the largest global network of luxury executives and experts, Luxury Institute has the ability to provide its clients with high-performance, leading-edge business solutions developed by the best, most successful minds in the industry.
Over the last 16 years, we have served over 1,100 luxury and premium goods and services brands. We have conducted more quantitative and qualitative research with affluent, wealthy and uber-wealthy consumers than any other entity. This knowledge has led to the development of our scientifically proven high-performance, emotional intelligence-based education system that dramatically improves brand culture and financial performance.
With access to the largest global network of luxury executives and experts, Luxury Institute has the unmatched ability to provide its clients with high-performance, leading-edge business solutions developed by the best, most successful minds in the luxury and premium goods and services industry.
The Global Luxury Expert Network (GLEN) is a growing network of hundreds of luxury goods and services experts who form the core of Luxury Institute’s research, training, and business solutions teams. Now, the best minds in the industry are available to you on a project basis. Our experts have a minimum of 12-years of operating experience and are current and/or former C-level, VP or Director executives at top-tier luxury brands with proven track records of high-performance. Their expertise spans over dozens of luxury and premium goods and services categories. Their real-time intelligence, diverse perspectives, strategic and tactical analysis, innovations, recommendations and solutions are critical to the success of all clients.
The Luxury Institute will carefully select the right experts to serve your needs while managing the project from start to completion. All team members selected to participate on your project will be vetted to ensure the highest levels of expertise, integrity, confidentiality, and zero conflict of interest.
To learn more about Luxury Institute, request a project, or become an expert of GLEN, please contact https://www.luxuryinstitute.com.