Data Privacy

Importance of Data Privacy for Loyalty Marketers

64% of customers blame companies over anyone else, including a hacker, if a company loses personal information/data. For a loyalty marketer, it is important to be in tune with security norms and developments because along with certain restrictions, data also brings in wealth of opportunities to retain customers for brands.


Jubin Mehta

4 Min Read

October 13, 2022

One in four Americans won’t do business with data-breached companies, reads the headline of this ZDNet report. And this is getting increasingly true across the globe. Cyber security and customer data privacy has become increasingly important for loyalty marketers and brands in general. At Capillary, we take customer privacy extremely seriously and as a loyalty marketer, you’re the gatekeeper of the end customer’s data. 


Regulations like GDPR and CCPA mean more stringent regulations (which are actually good for business). And as a loyalty marketer, one needs to have a clear framework for safeguarding customer data and using it in the best way to benefit both the customer and the business. Some of the points to be kept in mind are:


  1. Defining Personal Data: As a brand, how do you define personal data, what are the fields included in this? 
  2. Subscription Transparency: The way a customer signs up for communication and the way you ask for consent to send marketing information should also follow a framework. 
  3. Right communication: Both of the above should be clearly communicated upfront to the customer and the communication channel should always be open. 
  4. Customers own the data: The end customer needs to have control over their data and needs to have the right to access, edit and erase their personal data. 


Data is Everything and the Importance of Customer Privacy


Over the last couple of years, there has been a massive upsurge in digitization and alongside, a proportional increase in data. But the amount of data doesn’t mean anything if it is not collected in a meaningful manner. A BCG-Capillary report said:


  • Only 29% of consumers agree that handing over their data resulted in better products or services
  • 64% of customers blame companies over anyone else, including a hacker, if a company loses personal information/data
  • 75% of customers now limit the amount of personal information they share online


In such a scenario, it becomes critical to have customer interest at the center of all marketing activity. And this is easier said than done. A McKinsey survey reported that some CMOs have retreated to using mass marketing instead of data-driven marketing and this is a sure-shot way to get loyalty marketing all wrong! 


Understanding Contextual Integrity in the light of Data Privacy


Helen Nissenbaum, professor of information at Cornell Tech wrote an industry-defining book: Privacy In Context: Technology, Policy, and the Integrity of Social Life – where she introduced the concept of ‘Contextual Integrity’. 

The definition of privacy is very subjective and ‘Contextual Integrity’ basically tries to define it better by looking at information flows and how can we arrive at a more holistic version of privacy laws in this modern digital age. Contextual Integrity can be understood as “The right to privacy is neither a right to secrecy nor a right to control but a right to appropriate flow of personal information” (research paper).


And for a loyalty marketer, it is important to be in tune with these developments because along with certain restrictions, it also brings in new opportunities-

1) Privacy Innovation: Properly designed regulations can trigger new innovations which are capable of offsetting the costs of compliance. 

2) Data Privacy as a Competitive Advantage: While complying with policies requires investment in different forms, being ahead in the game gives you a competitive edge while pitching to new clients. Businesses and consumers care for privacy and there are opportunities where people are willing to pay a premium for better security. 


Data Privacy, Done Right

While here’s a post on all you need to know about data privacy, at Capillary, we’ve helped 250+ brands touch more than 900 million end customers in the best manner possible. 

As a loyalty marketer, while the brand collects information about the end customer, pre-defined rules help you store and safeguard the data. The end customer can set preferences for how and how often would they like to be communicated, in what ways, and a two-way communication channel through which they can voice their feedback. 


Chapter 3 of GDPR (General Data Protection Regulation) gives several rights of the data subject:


  1. Transparent information, communication, and modalities for the exercise of the rights of the data subject
  2. Right to information and access to personal data
  3. Rights for rectification, erasure, restriction of processing, and right to data portability
  4. Right to object and automated individual decision making


At Capillary, data privacy and security is a top priority and there’s a dedicated team headed by the Chief Information Security Offers. We are certified by the ISO, PCI, compliant with SOC2, and GDPR compliant. All data at rest is encrypted with state-of-the-art 128-256 bit keys and all production infrastructure is architected to sit within isolated Virtual Private Clouds (separate for computing, and storage). There is a four-step process we follow: 


  1. Continuous Auditing: We have a stringent audit plan of action where our Information Security Management Forum (ISMF) conducts regular audits to investigate operations across the board. 
  2. Client Assessment: Transparency is one of our core pillars of values and we’re transparent regarding everything security with our clients- the positive and the negative. We engage in several bug bounty programs like SafeHats to collaborate with security researchers and be proactive in plugging any holes. 
  3. Best Practices for the Best Security: Capillary platforms are well-secured and follow the best practices- secure data processing & transfers, role-based access controls, password-encrypted reports, and more. 
  4. 2FA at all access points: Access to development, pre-production, and production environment using VPN tunnels, and all access points have two-factor authentication for people. 



Conclusion – End Customer at the Center

It’s important for loyalty marketers to look at these regulations as steps forward in making life better for the end customer. Leaps in technology have enabled brands to do a lot more with customer data and with that, also comes enormous responsibility in the form is consumer trust. It is in the best business interest, to stay ahead of the curve when it comes to data privacy. This can be done by using some of the best consumer experience platforms like Capillary and delivering a superior end-customer experience. 

Aauthor Name

Jubin Mehta

Jubin Mehta is the Associate Director of Marketing at Capillary Technologies. He is a full stack marketer with 10+ years of experience as a tech journalist and B2B SaaS marketer. Also a meditation instructor, he is a proponent of non-dual philosophy. He can be reached out on Twitter @jub_in.

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