Demand for personalized customer service is rising. According to the 2022 Gartner Customer Service and Support State of the Customer Survey, 71 percent of B2C customers and 86 percent of B2B customers expect companies to be well-informed about their personal information during service interactions. In addition, modern service and support channels, such as chatbots and virtual customer assistants, work best with data-driven knowledge and insights based on the individual customer.
At the same time, people expect a certain degree of privacy in all parts of their lives, including their relationships with businesses. High-profile data breaches and data ethics scandals are elevating privacy concerns among customers and accelerating their desire to maintain control of their personal information. Government regulations around the globe, such as Europe's General Data Protection Regulation, have proliferated and redefined the standards by which data is collected, stored, and used.
These privacy concerns will require companies to walk a fine line between providing customers with a personalized experience while still respecting their concerns around privacy and their data.
Customers expect their data to remain private, secure, and used solely for its intended purpose. Companies that use personal data beyond what the customer expects will risk losing customer trust and potential future business. The inherent tension between personalized experiences and personal privacy will increase as data-driven interactions become necessary for effective customer service and customers become more alarmed by how their data is used.
A data-driven approach to designing personalized service experiences can have benefits for both the customer and the company if done right. Providing an experience that accounts for customer context will require service representatives to use data to enhance the customer experience without being deemed too creepy by customers. Representatives will need to use more judgment within an increasingly varied set of live interactions to ensure information they use with customers doesn't cross the line.
Organizations must ensure that customers' personal data is not used for purposes outside the original intent or customer understanding. Customer preferences and consent for specific data uses must be clear so that customer expectations are primed for their experiences. Overly broad terms of service can lead to confusion and concern from customers who might have expected representatives to know their product usage but aren't comfortable with the same data being used in other ways, or worse, shared with third-parties.
Companies can mitigate the confusion in personal information use by being explicit with consent management and preference settings in the service journey. Customers need more control over how their data is used, and in many cases it's demanded by law. Delineation of these settings by functional area and use case will help avoid conflating uses of data and breaching customer trust (e.g., using data collected to improve the website for marketing purposes instead). Being proactive and transparent in communication about data use and preferences will ultimately save time and effort and build lasting good will with customers.
An undercurrent that impacts personal data usage is that third-party data sources are becoming harder to obtain and use, so internal data assets will be increasingly valuable to the business. Proper stewardship of customer data will be more challenging as the demand for and value of that data increases. Organizations must make data ethics a core component of their data management strategy by creating data use cases based on how they bring value and benefit to customers, not just to the company.
Lastly, when embedding data within channels and experiences, it is important to know that more data is not always better. Organizations should collect only data that is needed to deliver timely resolution and added value by defining each data use case. Such privacy by design will help ensure organizations are aligned with customer sentiment and likely staying ahead of evolving global regulations.
Brad Fager is a senior director at Gartner, where he leads a portfolio of research developing insights and actionable recommendations for customer service and support executives.