2 people are talking in front of a computer about what is shown on it. In front of it are drawn security and data protection logos

19.06.2024

The importance of data protection in customer service

One of the most valuable assets for companies is the personal data of their customers. After all, big data is an opportunity for big business: data and information can be collected, analysed and resold in order to provide personalised advertising, optimise business processes, open up new markets or improve customer service.

However, consumers are aware of the significance and risks associated with the use of this data. According to an online survey by Genesys, around two thirds want to give their active consent before companies pass on their information to third parties. More than 90 per cent are concerned that their personal data could be misused. Almost half of those surveyed stated that they would lose trust in a company if their personal data were misused. In addition, a PwC study from 2017 found that over 70 per cent of respondents would not use any further services from a company that passed on their sensitive data without their consent. Data protection is important to consumers. Companies should therefore position themselves as representatives of secure customer service.

What is data protection?

Data protection refers to the protection of personal data and is intended to protect sensitive information of individuals from misuse, especially in the age of digitalisation. To prevent abuse, national governments and international commissions have introduced data protection laws and guidelines. In 2018, the EU Commission presented the new General Data Protection Regulation (GDPR) to protect EU citizens and their information.

The role of data in customer service

In general, the collection of data is strictly regulated by law. However, there are some exceptions and loopholes. As part of customer service, companies may collect personal data if they need it to prepare quotations, make deliveries or issue invoices and to respond to support enquiries and complaints. The data enables companies to develop an in-depth understanding of their customers’ needs and thus provide personalised solutions and offers. The most important advantages for the use and generation of personal data in customer service are as follows:

Personalisation

The analysis of personal data opens up numerous opportunities for companies to personalise their products. In addition to creating personalised offers and recommendations, companies can better understand and assess customer needs and preferences and conduct target group-specific marketing. This creates a positive customer experience and strengthens long-term relationships, thereby increasing customer loyalty.

Efficiency

Personal data is also crucial for the efficiency of internal processes. With their help, fluctuations in demand and requirements can be anticipated and resources planned accordingly. This is not only advantageous for sales and production planning, but also important for resource allocation in customer service.

Proactive service

Data analysis enables problems to be anticipated and sources of problems and frequent faults to be identified. Companies can therefore take proactive measures to avoid known problems. This increases customer satisfaction and strengthens customer loyalty.

Feedback and improvement

By collecting and analysing data and customer feedback, companies can continuously improve their customer service and products and respond more specifically to the needs of their customers. You can find out more about this topic in our white paper measuring customer satisfaction.

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Data protection: an essential component

For companies, the collection and processing of personal data is essential in order to provide successful customer service. However, it is important to be transparent and comply with legal requirements. After all, it is not only the collection of data, but also the observance and appreciation of data protection that brings advantages for companies.

Strengthen customer trust and loyalty

For customers, the protection of their sensitive data is a top priority. They expect an equally high level of prioritisation from the companies to which they entrust such information.enso hohe Priorisierung. Responsible, secure and transparent handling of data can strengthen the relationship of trust and customer loyalty. A breach of data protection, on the other hand, often leads to irreparable trust problems and a loss of customers.

Reputation

Data breaches can not only affect existing customer relationships, but also have a significant impact on future business relationships. Due to the high prioritisation on the part of customers, the reputation of a company can quickly be significantly damaged in the event of a breach. Negative headlines and public scandals surrounding data protection can affect trust in the long term and deter potential new customers from using a company’s services.

Legal requirements

In addition to the qualitative advantages of data protection compliance, there are also specific legal advantages. As mentioned above, many countries have strict guidelines for the collection, processing and storage of personal data. In Europe, for example, there are laws such as the GDPR. Violations of these regulations can have considerable legal consequences.

Ethics and responsibility

Last but not least, data protection is a question of ethics and responsibility. Companies have a duty to handle customer data responsibly, to respect the privacy of their customers and to protect sensitive data from misuse.

Best practice for data protection in customer service

In order to utilise the advantages of data analysis, but also those of data protection, companies should follow the following best practices:

Transparency

It should be clear and transparent to customers what data is collected, where, how and for how long it is stored, what the company uses the information for and what rights customers have in relation to their own data.

Security

Companies should take high security precautions to protect data from unauthorised access and misuse. In addition to encryption, this also includes regular security checks and the implementation of internal data protection guidelines.

Minimisation of data collection

Companies should only collect and store information that is actually needed. This avoids data waste and reduces costs.

Employee training

Employees should receive regular data protection training to ensure that they comply with the company’s guidelines and best practices and understand their importance.

Response plan for data breaches

In the event of unexpected data breaches or misuse, clear procedures and processes must be established in order to respond quickly and effectively and minimise the damage.

Conclusion

Data is a powerful tool in customer service, but its use requires a responsible and careful approach to data protection. It is important to find a balance between the benefits of data utilisation and the requirements of data protection. Through transparency, security and ethical behaviour, companies can gain the trust of their customers and reap the benefits of data analysis without compromising their privacy.