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“Most businesses are making the fundamental mistake of thinking inside-out, but by thinking outside-in, they will automatically put the consumer first,” he told Consumer Identity World Europe 2017 in Paris.
This means instead of thinking about what suits the business, the business looks at what will best suit its customers, what works best for customers and taking customer preferences into account.
“Most businesses need to switch from the approach where they are telling consumers what they want them to do, to making it clear they are willing to do things the way the consumer wants,” said Kuppinger.
“We do what you want, needs to be the message, because this is the best way to ensure that consumers will want to do the most with them,” he said.
In the light of the European Union’s (EU’s) General Data Protection Regulation (GDPR), Kuppinger said it is now even more important to get the balance right.
From a consumer perspective, this means ensuring that services and interactions with suppliers need to be simple, and as frictionless and transparent as possible.
“Aside from GDPR requirements, consumers are generally more willing to share data if the reward is clear and [know] that organisations use their data only for the purpose it was originally collected for,” said Kuppinger.
From a business perspective, it is therefore important to ensure that there is a standard approach to customer data throughout the organisation and that personal data is collected only when necessary.
“Consent is a key aspect of the GDPR, and organisations need to ensure that consent is freely given, specific, informed and unambiguous,” he said.
“They need to be clear about what they are collecting, what purpose they are collecting the data, and they must provide processes for consumers to withdraw consent if they wish.”
However, done correctly, collecting and managing consumer information can improve the customer experience, said John Tolbert, lead analyst at KuppingerCole.
“Consumer identity management can also enable new business models, such as freemium models where basic services are provided free with the option of upgrading to paid services or shared revenue models,” he said.
Tolbert also emphasised the importance of making it clear to consumers what they will get in exchange for agreeing to allow businesses to collect and user their data.
“Again, getting the balance right is important because the more data you collect the more friction you add, so collect just enough information to be useful to keep friction to a minimum,” he said.
Tolbert said it is always important to be explicit about information is being collected, collect only what is necessary, and reduce friction by avoiding pop-ups that continually ask for more data.
“Fine-tune how you interrupt visitors to your site, be conservative in the information you collect and always ensure you have good consent management processes to collect and store consent,” he said.