Your contact data assets represent the lifeblood of your company. Your organization probably has procedures in place to secure this data. But what about the third-party vendors you work with?

Some vendors – particularly email validation providers – have terms in their master service agreements (MSA) allowing them to store the data you send them. And, in some cases, use this data for their own “research” purposes. This article discusses why we feel this is a bad idea, and why you should be careful about who accesses your data.

The problem with third-party data storage

In an ideal world, any company that processes your most sensitive data should offer you a gold-plated guarantee that it will never fall into the wrong hands. Unfortunately, it doesn’t always work that way in practice. Here are some sobering facts:

• There have been numerous well-publicized breaches of customer data involving vendors and contractors, such as the recent exposure of over 1.3 million customer records by a Walmart vendor, the infamous Target payment card breach of 40 million customers in 2014, and many more.
• According to a 2018 study by the Ponemon Institute, 59% of companies surveyed experienced a data breach caused by a third party, and three-quarters of respondents feel that these incidents are on the rise.
• Third-party data storage has even been a problem in security-critical environments like health care, with regulatory burdens such as HIPAA compliance. In 2018 an estimated 20% of health care data breaches were due to third-party vendors, including some of the largest breaches, with problems ranging from lax procedures to attacks by insiders.

These concerns are compounded when you work with vendors who retain and store your data beyond its original business purpose. Unfortunately, terms allowing for the storage and subsequent usage of this data are often buried in the fine print of service agreements, leaving its security in the hands of the vendor. This can potentially open you up to risks that fall outside the reach of your own data security policies and procedures.

We don’t store your data

Of course, one of the best ways to safeguard your data is to work with a vendor who won’t store it in the first place – like Service Objects. We never store customer data, and security and privacy are among our highest concerns.

When you use one of our real-time products for contact data validation, we process each record you send us against continuously updated databases such as USPS and Canada Post address data, known problem email addresses, and over 400 million phone listings, together with other proprietary resources. And once we return these validation results to you, the original data is discarded.

We invite you to learn more about our own bank-grade security procedures, including secured 24/7/365 data centers, encryption of sensitive information, and hardened servers with multi-layer perimeter security. And, of course, a policy that no copies of your real-time data nor your responses are stored.

As we approach three and a half billion transactions validated, with a track record stretching back to our founding in 2001, we feel that data security policies are extremely important. This is why leading companies like Amazon.com, Microsoft, and most major credit card providers trust us with their data. Firms like these scrutinize contract terms involving access to their data, and you should too.

In a world of big data, information for sale, and people oversharing on social media, this past decade has lulled many marketers into believing in a post-privacy era of virtually unfettered access to consumer and prospect data.

Even consumers themselves share this perception: according to an Accenture survey, 80% of consumers between the ages of 20 and 40 feel that total digital privacy is a thing of the past. But today this Wild West scenario is becoming increasingly regulated, with growing constraints on the acquisition and use of people’s personal data. Directives such as the European Union’s GDPR and ePrivacy regulations, along with other initiatives around the globe, are ushering in a new landscape of privacy protections.

Much has been written about how to comply with these new regulations and avoid penalties, on this blog and elsewhere. But this new environment is also a marketing opportunity for savvy organizations. Here, we examine some specific ways you can position yourself to grow in a changing world of privacy.

Leverage Data Quality With These Five Key Marketing Strategies

Be transparent. In their 2018 State of the Connected Customer survey, Salesforce.com found that 86% of customers would be more likely to trust companies with their information if they explain how it will provide them with a better experience.

Offer value. The Accenture survey mentioned above notes that over 60% of customers feel that getting relevant offers is more important than keeping their online activity private, with nearly half saying that they would not mind companies tracking their buying behavior if this led to more relevant offers.

Give customers what they want. According to European CRM firm SuperOffice, the post-GDPR world represents an opportunity to create segmented customer lists, through techniques such as separate website pop-ups for different areas of interest and content marketing via social media.

Look at the entire customer life cycle. Many firms offer a one-time free incentive, such as a report or webinar, in exchange for contact data and marketing permission. However, this can lead to fraudulent information being offered to get the goodie (we can help with that), or even a real but never-checked “wastebasket” email address. Instead, consider offering a regular stream of high-value information that keeps customers connected with your brand.

Change your perspective. This is perhaps the most important strategy of all: start looking at your customers as partners instead of prospects. Recent regulations are, at their root, a response to interruptive marketing strategies that revolve around bugging the many to sell to the few. Instead, focus on cultivating high-value client relationships with people who want products and services you offer.

More Consumer Privacy Can be a Good Thing

Whether businesses are ready or not, they are increasingly facing a world of marketing to smaller prospect lists of people who choose to hear from them for specific purposes, starting with Europe and spreading elsewhere. But this can be a good thing, and indeed a market opportunity. By changing your selling focus from a numbers game to one of deeper and mutually beneficial customer relationships, you can potentially gain more loyal customers and lower marketing expenses. In the process, this new era of consumer privacy could possibly end up being one of the best things that happen to your business.

Protecting your customers’ privacy and creating a mutually beneficial relationship starts with having the most genuine, accurate and up-to-date data for your contacts.  Download our white paper, Marketing with Bad Contact Data, to learn more about how quickly customer data ages and the impact on your business.