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The ROI Of Privacy

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© 2019 Forrester Research, inc. opinions reflect judgment at the time and are subject to change. Forrester ® , Technographics ® , Forrester Wave, TechRadar, and Total economic impact are trademarks of Forrester Research, inc. all other trademarks are the property of their respective companies. unauthorized copying or distributing is a violation of copyright law. citations@forrester.com or +1 866-367-7378 Forrester Research, inc., 60 acorn Park drive, cambridge, Ma 02140 usa +1 617-613-6000 | Fax: +1 617-613-5000 | forrester.com FoR B2c MaRKeTing PRoFessionaLs The ROI Of Privacy Business Case: The Customer Trust And Privacy Playbook by Fatemeh Khatibloo and Reggie Lau with Mary Pilecki, arleen chien, stephanie Liu, Matthew Flug, and christine Turley February 5, 2019 Better Privacy Practices drive Revenue? it's True For years, Forrester has written about the opportunity to make privacy a competitive differentiator. But until recently, our clients have struggled to fund and implement privacy programs that are truly differentiated and go beyond the bare minimum required for compliance. This is typically because: › Business leaders worry about overly restrictive privacy programs. Today, privacy in most firms is managed by security, legal, or compliance teams. The perception of these groups is as restrictive, non-revenue generating cost centers, with little understanding of innovation. as a result, and with limited exceptions, they're often underfunded and under-resourced. This serves marketing leaders just fine because it means they can charge ahead with data innovation without worrying about privacy or ethics; they check all the right security and compliance boxes required by their chief information security officer (ciso) and procurement, but don't stop to think about whether they should be using data the way they are. › market forces didn't favor strong privacy practices. it's hard to justify investment in a business practice that has had little market awareness or visibility. consumers said they worried about privacy, but certainly didn't understand the extent of the data economy and took few measures to protect themselves. until recently, the media didn't really cover much beyond data breaches and identity theft. and while boards and investors worried increasingly about data security practices, they widely assumed that privacy was just a subset of security and risk. in 2018, that all changed, and privacy programs are finally under more scrutiny thanks to transparency requirements of new laws in europe and elsewhere. › It's challenging to assign revenue benefits to customer-first privacy programs. When firms are on the hook to report quarter-over-quarter growth, with little focus on longer-term metrics like customer lifetime value (cLv) and customer advocacy, robust privacy can be a problem. The early phases of a customer-first privacy strategy are loaded with cost — and sometimes opportunity cost — without much upside. The benefits come later, but without an incentive to make those early investments, many firms end up with a patchworked and immature privacy program that rarely puts customer trust and data ethics first.

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