Consumer Data Privacy

Top 5 Reasons Why Consumer Data Privacy Is Important

Data collection is a booming industry that businesses are increasingly relying on to gain better insights into what their customers want and need. It can be an incredibly effective and efficient tool to allow your business to create personalized, targeted marketing with a much higher conversion rate.

Unfortunately, when it’s done wrong, data collection can be incredibly invasive and even illegal when companies don’t have a full grasp of what it entails.

Good consumer privacy policies and practices limit or monitor how businesses and third-party data collection agencies collect and use your user’s data. This can include anything from web browsing cookies, purchase histories, and app engagement. 

While this may not sound like anything major, at its worst, poor consumer data privacy policies can lead to a variety of problems for both you and your business. For example:

  • Identity theft: Almost three-quarters of consumers consider identity theft and fraud as one of their top online concerns. Identity theft can lead to drained bank accounts, fraudulent loans, and accessing various private details that can permanently negatively impact a user. Identity theft can be one of the most devastating outcomes of poor consumer privacy policies and processes. Over half of consumers who have been victims of identity theft feel an ongoing sense of powerlessness and helplessness that’s proved hard to rid themselves of, long after the event.
  • Hacks and breaches: Hacking attacks are said to occur as often as every 39 seconds. The average cost of a data breach was said to be $3.86 million and that’s not taking into account the reputational damage the business suffered as a result. Depending on the industry a data breach can result in some costly litigation where your consumer’s personal records and details are exposed.
  • Unethical data sales: With an estimated value of over  $200 billion data collection and sales is an increasingly booming industry. While reactions to personalized advertising and marketing and advertising have been mixed, it’s an increasingly unpopular topic, especially for your more informed consumers.

As consumers become better educated, informed, and protected when it comes to their consumer privacy rights, it’s just as important that businesses become more aware of why consumer data privacy should matter to them too.

Top 5 Reasons Consumer Data Privacy Matters

While privacy may have seemed like an antiquated notion at the turn of the millennium., in today’s world, the need for privacy has become more important than ever. 

While some online users have found targeted advertising and marketing useful, a large majority of users disagree. Invasive, disturbing, and manipulative are words the internet has often associated with modern collection methods. To find out more about why consumer data privacy matters, for both you and your consumers, read ahead.

1. Customers want to feel safe

Your consumers are the most vital parts of what makes your business a business. That’s why appealing to them and delivering what’s important to them matters so much.

One of which is their data privacy.

Consumer Data Privacy

As many as 80% of consumers are worried about how companies collect their data as well as what it’s used for.

With data breaches becoming more and more common as well as increasingly damaging, consumers have every right to be worried about what happens with their information. As many as 1 in 10 global internet users are using ad-blocking software out of sheer concern for the safety of their online presence and security.

A recent study by the Pew Research Center showed that Americans felt a mixture of concern and confusion when it came to controlling their personal information online. As many as 64% of mobile users say that a brand’s data privacy policy is an important factor for them. 46% of U.S. consumers say that buying a product is based on whether or not they’re satisfied that a company will protect their data and privacy.

Consumers today want the sites and services they interact with to ask as little of them as possible. They also want these platforms to be reactive when it comes to sketchy activities and be proactive about protecting their data. 

Appealing to consumers through this need is often referred to as Privacy-First Marketing. Software solutions that support data subject access requests (DSARs), records of processing activity (RoPAs), and data processing agreements (DPAs) can help you reach customers who focus on valuing their data privacy. RopA is one of the more significant solutions so to get a full understanding of RoPA, click here to read more.

Remember, ultimately, consumers who feel this are more likely to trust and therefore return to a brand.

2. It’s the law

Not only are today’s consumers increasingly concerned about their data privacy, but so are governments across the world.

When it comes to the United States, the government uses a combination of laws and regulations to ensure that companies take the privacy of their users seriously. In recent times, two of the most significant regulations are:


The General Data Protection Regulation (GDPR) is Europe’s most recent update regarding data privacy regulation. It’s an update to existing laws that protect individuals from unsafe data practice and unauthorized data use. One of the most pertinent effects of the GDPR is that it limits companies to only being able to collect data that they have a legal reason to do so. It is expressly aimed at making sure consumers are directly aware of what data is being collected and why. 


Taking effect as far back as 2020, the California Consumer Privacy Act (CCPA) introduced a variety of consumer rights and guidelines to direct organizations regarding customer data. To date, it’s one of the most comprehensive pieces of data legislation stateside in the U.S. It applies to a range of corporations in California as well as third-party data companies. It also allows consumers to know how their data is being collected, when and to whom it’s being sold, as well as the option to reject those premises. Failure to adhere to the CPPA can result in legal action and fines.

When you’re trying to establish a quality, sustainable business, the last thing you want is legal troubles. Staying in line with legal regulations is the best way to ensure long-term success as a business and brand.

3. It safeguards your businesses reputation and brand

When it comes to business, your brand’s reputation is everything.

In an increasingly digitized, fast-paced world, your reputation for offering your customers high-quality, significant data privacy standards, can matter a lot. Data breaches can significantly impact your brand’s reputation and even have a direct financial impact on your business.

Your brand’s value is inherently tied to the data privacy standards you see as non-negotiable. Even a single data breach can have a catastrophic effect on your brand and business. 

Meeting regulations means you, at the very least, meet the legal requirements needed to protect your brand from litigation. That means, by simply adhering to data privacy laws, you can safeguard your business from threats and revenue losses that can occur despite your company’s best efforts.

Consumers want to believe the brands they trust their data with have no malicious intent. By following data privacy regulations, to the letter, you show that your customers have made the correct choice. 

You may not think so at first, but this can provide you with a significant competitive advantage.

4. Embracing it shows you’re an ethical business

Gone are the days when people joked about “business ethics”, being an oxymoron. In today’s world, consumers want the brands they support to actively make ethical decisions.

That can be anything from a commitment to cruelty-free products, investing in green technology and infrastructure to embracing employee wellbeing. Or, in the case of digital businesses, protecting their customer’s data.

Whether it’s business orientated or not, every business has a code of ethics and values it claims to strive towards. Today’s consumers are more aware of this than ever and they want brands to actively practice what they preach.

In an age where users are more and more concerned about what their data is being used for, a brand’s ethics can make or break its business. Adhering to privacy policies that take consumers’ data privacy concerns seriously can be incredibly impactful.

Brands that do what they say they will are appreciated by the consumers they are trying to appeal to. In the long run, this can help a brand grow its consumer loyalty and trust.

5. Can help develop a sense of loyalty

Loyalty is one of the most essential components of a successful, long-term business. The more trustworthy, reliable, and valuable you and your brand are, the more likely you are to receive users/ customers.

The more trustworthy your brand is, the more loyalty it generates. 

Your brand’s reputation is a key factor when it comes to achieving this. Brands with bad reputations caused by privacy concerns and security leaks are going to suffer when it comes to receiving return consumers.

Data privacy policies that actively and effectively protect your consumers can increase your brand’s reputation and value. When you tell consumers that you’re purposely going out of the way to protect their data and information,  you’re conveying that you appreciate them as customers and people.

This can have a knock-on effect that stimulates your brand’s growth, development, and relationship with its customers.

Final Thoughts

When it comes to data privacy laws around the world, the truth is it’s a lot simpler than it seems.

The privacy of your consumer’s data is important because, like your business and you as an individual, you value your privacy. While you may not have anything to hide, the last thing you want is your curiosity, habits, and preferences being used to manipulate you.

Protecting and safeguarding our consumers and their data isn’t just for their benefit. The safer you make an experience for any given consumer, the more likely they are to interact with you in the future.

And as any businessman will tell you, return business is good business.

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