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AdvantageJan 29, 2018 12:00:00 AM2 min read

How GDPR Could Affect Your Bottom Line

Any businesses still hedging their bets on the impact of the EU’s General Data Protection Regulation (GDPR) may end up getting caught flat-footed if they don’t have the right strategy in place. According to a recent survey, 82 percent of European consumers will likely take advantage of their new data access rights under GDPR, meaning organizations that are mulling over their readiness strategies need to get ready — and quickly.

The big deal? There is a major blind spot that many businesses may not see coming. In an earlier post, we discussed GDPR risk-readiness and the steps that businesses need to take to ensure they — and their systems — are fully ready to comply when the GDPR goes into effect in May. 

But this is just one piece of the upcoming legislation’s impact on businesses. GDPR’s impact goes well beyond the challenge of handling people’s requests for their data — it will have a very real effect on revenue as well.

GDPR Revenue Readiness and Your Bottom Line

GDPR’s financial repercussions encompass much more than the potential fine of up to €20 million or 4 percent of worldwide annual revenue that comes with failure to comply. The regulation can impact a business’s bottom line in an even more substantial way.

Consider that for more than a decade, the thirst for data-driven decisions has exploded. Today, data is the fuel for customer insight practices and downstream offer personalization. Businesses of all shapes and sizes have established highly proficient practices that dissect and analyze customer data, for the purpose of understanding customers better and influencing customer lifetime value (CLV). Over the years, they have acquired customer data — from third parties, as well as the individual customers themselves — in hopes of getting better insight into each individual’s needs and behaviors in order to deliver a better customer experience, and thereby generate more revenue for the business.

But in the GDPR era, this customer data boom may come to an end. Consumers will be able to contact any company and ask for their data to be deleted. A new reality is about to take hold, one in which businesses will, in all likelihood, have less data to work with than they do today. And with less data, it may be more difficult to come up with personalized customer experiences that help generate revenue. So the looming challenge for businesses will be to find ways drive the same revenue results with less customer data at their fingertips.

To rise to the challenge, businesses will have to get the most out of the customer data they do hold. This will mean leveraging the potential of artificial intelligence to improve the accuracy of their insights. Additionally, businesses will have to activate those insights in more customer touchpoints and interactions than ever before.

Read the full post HERE on CMS Wire.