Consumers impacted by rising costs
The start of 2022 has not heralded good news for consumers. On top of an increase in National Insurance (due in April) and general cost of living, the estimated increase in household energy bills has risen to 50% as costs filter down from the energy companies into every UK consumer household. That means an average household is now looking at a yearly utility bill of around £1,138. And this current energy price cap will be reviewed again in April, and the likelihood of it rising again is not off the table.
For many consumers, this is simply terrifying and will create an environment where a lot of households will be forced to choose between eating and heating. For many it could end up worse than that with unpaid bills leading to bad credit ratings and long term implications.
It’s not just the consumers this impacts
Unpaid bills don’t just effect consumers and their personal situation, it also impacts the organisations left holding the debt. No-one can deny that there is a likely continuing bad debt issue round the corner. That not only creates more work for utility companies in chasing down the debts, deciding how to structure payments and which debts to write-off, it also will result in bad debt ratios for companies.
Utility companies generally have high debt ratios due to large infrastructure investments so while this can be managed, an increasing debt ratio at a time of low consumer confidence can have an impact on stability and financial reputation, even for the biggest suppliers. As such, managing the debt, helping consumers to pay their bills, and identifying those at risk of defaulting is vital.
Helping consumers impacted by rising costs
Utility brands need to be smart with their data moving forward because it can help them identify vulnerable households using their services. In turn, they can use this knowledge to encourage a relationship of innovation, support, and loyalty between brand and customer. Ensuring that data is clean and up to date is the first step to take. Using products such as REaD Cleanse can make this a straightforward process and a compliant one in line with GDPR regulations.
The next step is identifying vulnerable consumers, but this isn’t as straightforward as solely identifying low-income households or elderly consumers. When considering a consumer’s vulnerability, brands need to understand their impact through customer communication, household visits for repairs or meter readings, and how those consumers are billed, whether that’s via direct mail, direct debit, or email.
Recognising likely vulnerabilities
Our latest Vulnerable Consumer Score Model allows brands to better understand their consumers’ needs and communication preferences. Every household is scored and the score has been created using a combination of factors, including: age, income, housing and education; market forces acting on the consumer; transient states of the consumer, such as health and Covid impact; and levels of susceptibility to these market forces.
Once the score has been applied, brands can tailor their marketing strategies, billing communications and policies and procedures to fit the needs of that particular consumer, creating a greater level of trust and transparency. In addition, by identifying likely vulnerable consumers at key contact points can ensure that the conversations help are based on an understanding of risk, and the potential for a customer to be under financial strain.
This, in turn, drives significant improvements in customer service, creating trusting, loyal customer relationships and improving brand reputation.
Taking care of customers in 2022
2022 is likely to be a challenging year: while we may no longer have COVID to contend with in the same way that we did in 2020 or even in 2021, there are still plenty of challenges ahead. As cost of living increases across the board, more and more families and individuals will be impacted. It is the responsibility of every brand – irrespective of sector, but essential for the energy sector, which is so crucial to our health and wellbeing at home – to ensure their customers are not going to be left out in the cold. By identifying vulnerable customers as early as possible, utilities providers can help them before major issues occur – and that’s got to be a good thing all round.
How to engage consumers this festive season
While Christmas is the most wonderful time of the year (according to Andy Williams), it is also the most important time of the year for retail brands.
But after a rollercoaster couple of years, and with 2021 the year in which COVID-19 finally killed off some of our most-loved brands, what’s in store for retailers this festive season? We’ve taken a look at some of the key statistics and trends in retail shopping habits and furnished you with tips and tools to help you capitalise on these trends and make the most of the upcoming festive period.
Retail ho ho’s no no’s
The last two years have hit the retail industry incredibly hard. Thanks to the coronavirus pandemic, retailers have had a challenging time, with stores closed, staff furloughed and supply chain issues. At the same time, multiple lockdowns caused a significant shift away from the high street to e-commerce.
Research from the ONS, published earlier this year, revealed the extent of the changes wrought on the retail sector: in 2020, total retail sales volumes fell by 1.9% compared with 2019, the largest annual fall on record. However online sales rose to a record high of 33.9% as a share of all retail spending, the highest growth seen for 13 years, according to e-tail association IMRG.
More than 8,700 British chain stores closed in the first half of 2021 and while some brand names have disappeared from the high street forever (goodbye Topshop, Debenhams and Thorntons), some brands – especially those with a strong e-commerce presence – have thrived, especially the “Big Four” supermarkets, Amazon, Marks and Spencer and Boots, according to Statista.
Where and how are consumers spending?
But it looks like consumers are planning to buck this trend in 2021: Statista research shows that in the 2021 holiday season, the average Christmas spending on gifts in the UK was higher compared to the previous two years. UK consumers were expected to spend the most on consumer electronics, at around £51 in 2021, compared to £49.20 in 2020. Compared to the previous year, per capita spend on clothing and footwear saw an increase in 2021 going from £26.94 to £38.79, although this is still far below the levels observed in the pre-pandemic period.
Research from Canopy Media shows that the pandemic also affected how people shopped for gifts in 2020. The number buying online grew to 85%, up from 78% in 2019, while, due to a mix of store closures and consumer concern, the number shopping in-store dropped from 77% in 2019 to 58% in 2020.
When are consumers shopping?
New research from Kantar’s GB Target Group Index (TGI) consumer data has found that 21% of adults (over 11 million people) are planning to start their present purchasing in November. Kantar also found that, amongst the November Christmas shoppers, 44% of them (5 million people) buy Christmas presents for six or more people. November Christmas shoppers can also prove to be a lucrative group in their gift purchases: the data shows that well over half of them (55%) claim to usually spend £200 or more on Christmas gifts, compared to just 37% of those who start their Christmas shopping in December. This means that now is a key time to engage consumers with products and services that will be gifted during the festive season.
Christmas shopping trends
The likes of Facebook, Twitter, Instagram, Tik Tok and Pinterest account for approximately 60% of all Gen Z and Millennial holiday purchases.
Nearly 70% of Gen Z and Millennials are actively looking to engage with brands both online and in-store that have a clear sustainable mission. Gen X is not far behind, with 59% seeking out ethical brands. For more on Green consumers view our Green Paper.
After the ‘pandemic puppy’ boom, it will come as no surprise that 64% of pet owners have said they will be buying presents for their furry friends. For more pet specific marketing data visit our page.
Shopping the sales
In 2020, consumers used incentives like Black Friday (39%), Cyber Monday (24%) and Amazon Prime Day to bag their bargains. In 2021, Klarna expects that figure to increase to 72% of shoppers who will rely heavily on similar incentives, seasonal sales and offers to stretch their budgets.
81% of shoppers expect to buy for family, while nearly half plan to purchase gifts for friends (44%). 34% will shop for their significant other, while a mere 7% plan to shop for work colleagues.
43% of Millennials and 38% of Gen Z plan to buy gifts from their wish lists for themselves if they don’t receive them from others, up from last holiday season, when 41% of Millennials and 32% of Gen Z said they purchased gifts for themselves.
Wisdom of the silver surfers
55% of Baby Boomers are more inclined to forgo participating in holiday sales altogether, but Klarna’s silver surfers are still savvier than most. Older Klarna shoppers are much more likely to take advantage of the holiday deals than the
average Joe, with only 43% of Klarna Baby Boomers saying they won’t shop sales.
How we spend it
While we’re feeling more excited about the first ‘normal’ Christmas since 2019, a number of factors are stretching the purse strings: personal finances are under pressure, unemployment and inflation are both on the rise; and cost of living is expected to go up in 2022. New research from VoucherCodes and GlobalData has found that, while consumers feel stretched financially they also want to make this Christmas extra special. As a consequence, many admit to being more inclined to rely on loans than their earnings to finance Christmas gift spending this year. In 2020, consumers expected to finance 75% of their Christmas gift spending via their earnings, compared to 62% in 2021. This year, people anticipate relying on credit cards, store cards, loans, and payday loans more than in 2020.
Data – your helpful Christmas elf
It is no secret that early to mid-November is the best time for direct mail (DM) campaigns during the festive period. And with the right data at their disposal, brands can further optimise their campaigns to reach the right consumer at the right time. And as we’ve seen, bricks and mortar is far from being obsolete: with the right planning and analysis of customer data, brands can drive footfall and traffic over typically quieter times with incentives or offers. With more than 44% of consumers purchasing presents for six people or more, they’ll be keen to make the most of incentives and sales.
But not only that, retailers need to ensure they are embracing a more omnichannel model. Klarna’s omnichannel research found that retailers’ main motivation when it comes to developing a more omnichannel approach is to better understand customers, but other factors also came into play.
Build a winning strategy
Consumers’ buying habits are changing, making it an optimal time to tap into new opportunities. Brands must take the insights from the past year and use them to build a winning strategy. Getting personal with consumers with tailored, relevant and timely communications and marketing will not only drive engagement but also optimise return on investment (ROI) and long-term value (LTV).
With access to a data asset repository of multiple, trusted sources of consumer data, brands can build an accurate, in-depth, and insightful view of the consumer population in the UK. By understanding who consumers live with, what they earn and spend, how they transact and what their hobbies are, for example, they can gain huge customer insight, enrich their marketing comms, build profiles and personas and select the appropriate recipients for their campaign.
The expansion of the ULEZ (Ultra Low Emissions Zone) and what it means?
As of Monday 25th the ULEZ now stretches from central London to the boundaries of the North and South Circular roads, covering just over 140 square miles! That’s 18 times the size of the original ULEZ (and a lot more postcodes to cover). Now containing just over 3.8 million people, families, schools and companies, all in the process of replacing vehicles no longer meeting the ULEZ standards for greener alternatives.
The expansion has been brought into tackle poor air pollution in the capital city from petrol and diesel vehicles that don’t meet the Transport of London standards, and already seeing incredible results:
ULEZ has saved around 12,300 tonnes of CO2 emissions to date!
It is estimates that 1 in 5 vehicles will be affected by this and liable to the daily charge from this month. Government schemes have been launched to help those within the boundaries of the ULEZ switch their old motors for electric or hybrid alternatives or scrap the old motors all together. Small businesses and charities have also been offered incentives to upgrade fleets to an electric alternative. However, the loans are shortly running out and as we all know, a new car is an investment, particularly to those in low-income households.
REaD Group’s latest Green Index Model in conjunction with More Metrics, has revealed how green behaviour differs across the UK and the expanding ULEZ boundaries.
- The more children in a family, the more likely they are to have environmental concerns.
- Those with no children are 19% less likely to be green.
- 18 – 24-year-olds are 60% more likely to be concerned about the environment.
- And much more …
Giving a greater insight into the sustainability preferences of the UK population at postcode level, and, giving brands the ability to tailor communications to those seeking green alternatives; especially to the automotive sector helping households move to more sustainable motors.
Find out more about REaD Groups latest green data, to target sustainability preferences for UK households!
New changes to I0S and what it means for marketers!
Apple’s latest i0S 15 update has certainly caused a stir for marketers trying to reach consumers using Apple devices. The new changes include Hide My Email and Privacy Relay, giving consumers the option to limit or prevent data sharing from their devices, masking emails and internet addresses, and hiding unique identifiers for online tracking. This change will make consumer opt-ins more precious than ever, especially for those using Apple email apps. But marketers will do what marketers do best – evolve!
In short, Apple users will now be able to:
- Turn off open tracking
- Hide their IP addresses
- Hide their email addresses
And this will impact:
- The reliability of open rates – They are still relevant but don’t measure campaign success from them
- The accuracy of open times
- The precision of automation
- Stop senders from using invisible pixels to collect open and IP addresses
- A/B testing will be impacted, so the removal of i0s devices from testing is recommended
So how many consumers are impacted by this new update?
58% of email consumers and 90.5% of all mobile users (that use an apple email) will be impacted by the latest update, with at least 90% of those users expected to opt-in to the new privacy settings. Why so much? The latest update will present Apple users with a clear opt-in message after the upload is complete, typically asking, “do you want to protect your email or not”. In the age of privacy-first technology, it is no surprise that so many are predicted to choose this new privacy feature.
Remember, this only impacts consumers using the Apple mail app!
Email marketing with i0S:
It’s not all doom and gloom! The new i0S 15 changes are no doubt changing the marketing landscape for email campaigns moving forward. Here are a few top tips to prepare for a new way of emailing with i0S 15.
- Segment your data – understand the density of apple users in your database.
- Measure clicks over delivered.
- Track open rates from the previous year to create a post line for future campaigns.
- Segment your data from previous email campaigns – consumers with a better engagement rate are less likely to opt-in to the new privacy settings.
- Rely on clicks for re-engagement campaign tracking.
- Bounce rates are your friends – this will help you measure changes to your campaigns.
- Ensure you have a clear Preference Centre.
- Identify alternative data you will need to bring in, like web data, other customer data – better relevance.
- Maintain email best practices; just because opens are going away is not an excuse to sending crazy as email platforms will likely still measure and filter your email accordingly.
And finally, embrace personalisation! Even though the new update will filter emails to an randomized email created by the Hide My Email feature of i0S 15, a personalised email is far more likely to be engaged with.
What does the UK Energy Crisis mean for Utility Brands and how can they protect their consumers?
Over the past two weeks, news of an Energy Crisis in the UK has built concern for utility brands and consumers. This crisis maps out an increase in wholesale energy prices meaning greater pressure on smaller utility brands (those prioritising greener energy and localism) and consequently greater energy bills for consumers. These soaring prices will undoubtedly see a rise in inflation, ultimately making the cost of living that bit more expensive for most households in the UK, making data quality and identifying vulnerable consumers an essential part of any Utility Brands communication.
At least 6 suppliers have already decided to exit the UK market amid threats of rising wholesale prices, leaving at least 835,000 households open to new suppliers. Ofgem have ensured that these households will be protected by energy price caps, yet new suppliers must ensure these consumer records are accurate. Establishing a trusted and seamless relationship from the get-go.
How can Utility Brands Secure Customer Loyalty?
According to the energy regulator Ofgem, energy bills are estimated to rise between 12-43% from October. Customers want to know that their provider is doing everything possible to protect their data. This means keeping data clean and up to date for marketing communication needs to be timely, informative, and accurate.
The importance of having an up-to-date database will allow utility brands to contact consumers at the correct address with information regarding their personal tariff, utility bills and changes to energy prices. Ensuring consumer wellbeing is central to the marketing strategy over the coming months. Having up to date gives you a much better understanding of the way your customer behaves.
Overall, if you want to increase your customer base and establish a sense of trust and transparency between your brand and your customer, you need to do everything you can to optimize your communications and, having accurate customer data will improve your marketing strategy while building trust and loyalty.
What can Utility Brands do to Identify Vulnerable Consumers?
The cherry on the top for lower-income households will be the latest government proposal to increase National Insurance payments and decrease Universal Credit. Utility brands, therefore, need to prioritise identifying vulnerable consumers and those most likely to struggle with rising costs.
REaD Group’s Consumer Vulnerability Score Model can identify these consumers, helping brands tailor their communications, and helping with debt ratio, identifying potential problems for consumers before major issues occur. It also allows utility brands to tailor home visits, and maintenance management to suit consumer needs, avoiding costly reputational damage, adhering to best practice guidelines and ultimately, protecting the consumer’s wellbeing.
For more information on our utility specific data products go to our
Or request more information on our Consumer Vulnerability Score Model
by going to our Contact Page
7 Key Principles:
GDPR introduced 7 key principles for the lawful processing of personal data. This refers to the collection, organisation, structuring, storage, use, communication and the life span of personal data. These principles are at the centre of compliant processing, an essential part of GDPR to be followed by brands and organisations:
Lawfulness, Fairness and Transparency:
(a) processed lawfully, fairly and in a transparent manner in relation to individuals (‘lawfulness, fairness and transparency’).
b) collected for specified, explicit and legitimate purposes and not further processed in a manner that is incompatible with those purposes; further processing for archiving purposes in the public interest, scientific or historical research purposes or statistical purposes shall not be considered to be incompatible with the initial purposes (‘purpose limitation’).
(c) adequate, relevant and limited to what is necessary in relation to the purposes for which they are processed (‘data minimisation’).
(d) accurate and, where necessary, kept up to date; every reasonable step must be taken to ensure that personal data that are inaccurate, having regard to the purposes for which they are processed, are erased or rectified without delay (‘accuracy’).
(e) kept in a form which permits identification of data subjects for no longer than is necessary for the purposes for which the personal data are processed; personal data may be stored for longer periods insofar as the personal data will be processed solely for archiving purposes in the public interest, scientific or historical research purposes or statistical purposes subject to implementation of the appropriate technical and organisational measures required by the GDPR in order to safeguard the rights and freedoms of individuals (‘storage limitation’).
Integrity and confidentiality (security):
(f) processed in a manner that ensures appropriate security of the personal data, including protection against unauthorised or unlawful processing and against accidental loss, destruction or damage, using appropriate technical or organisational measures (‘integrity and confidentiality’).
REaD Group presents our unique Switcher model
Built using the most accurate and comprehensive consumer data universe in the UK
REaD Group’s Switcher model allows the segmentation of a customer database to identify the propensity of an individual or household to switch from their existing provider.
Ideal for utilities and telecoms companies, our Switcher model offers a unique solution for both acquisition and retention, which also includes selection for channel preference to further improve your campaign performance. In addition bespoke model refinement can be conducted by REaD Group utilising client data to enhance model performance.
REaD Group hold the most comprehensive, clean, accurate and responsive permissioned consumer marketing data available in the UK. Apply this data to drive your acquisition and retention strategies.
REaD Prospect – we can create the perfect prospect pool using our unique set of variables, combining data from a wide variety of trusted sources including demographics, property details, interests and attitudinal data.
REaD Enhance – we can tell you more about your customers than any other data company! Apply that knowledge to your customer base to ensure your communications are targeted, relevant and profitable.
Our data provides granular details at household and individual level to support acquisition and retention.
- Propensity to switch
- Loyalty indicators
- Energy usage – gas and electricity
- Household variables including house type and number of
- Household composition including presence of children
- Demographics & lifestyle variables
- Affluence markers
How many new customers will you find?
REaD Group Switcher model is available for immediate testing, contact us now to set up a trial
REaD’s Customer Engagement Director, Scott Logie, discusses supporter engagement for the new season!
It feels like it is only days after the Euros finished and the new football season is back. Never mind that in between we had Wimbledon and the Olympics: what a feast of sport for those of us who love it. To be honest, I always feel that the football season starts too early. I could do with another couple of weeks to get mentally prepared before being launched back into it, but I am probably alone in this.
As a Scottish man of a certain age, it was always fashionable to have two teams. For me, my hometown team was Airdrieonians and my “English” team (because you had to have one) was Liverpool FC as my hero, King Kenny Dalglish, played there. Fast forward 40-odd years and Airdrieonians have sadly disappeared, and I have acquired two new teams, based on house moves, in Bristol City and Crewe Alexandra. It’s a lot to keep across but what else would I do otherwise?
Why now is the time to engage supporters
For the clubs themselves there is always a lot to keep across. And coming into this season there is probably more than ever before. Last season was one like no other. For most of it there were no fans in the stadiums, no merchandise sales from the shops and very little chance to engage with supporters face-to-face. This would have meant that income levels would have been down, and, at the same time, staff would have been furloughed and a lot of the essential work that would normally go on behind the scenes would have suffered.
I mentioned three teams that I support earlier. For each of these clubs I have bought tickets – in fact, season tickets for two of them – and yet I have only had emails from one of them (Liverpool) about games coming up.
Realistically, teams like Liverpool don’t need to spend time filling the stadium: that will happen for every game regardless. But they do need to share information on new strips, their TV channel and all the other ways I can follow my team. For Bristol City and Crewe Alex it is more basic: get bums on seats. And yet neither of them have sent me an email, or a bit of mail even, to remind me I can come back and support them with all my mighty singing. I think clubs are missing a trick, to be frank – think how many shops opened and we got emails and mailings to tell us about it. How much better response would there be for something that we like doing?!
Why data is key
Another area that I am obviously interested in is around the data that the clubs hold on their supporters and what has happened to that over the last 18 months. We know that data quality degrades; people move house, change email address, pass away and most of this isn’t shared with their football club. A really great way to start engaging with your fans is to make sure you hold the right data on them. And that is easy to do!
So, the fans are back but are the clubs making the most of their excitement? Are they getting in touch and telling us how we can do more for our club? Are they inviting us back to the ground and into the club shop? And are they sorting the data they hold on us so that they can do that? For me, as a multi-club man it doesn’t feel like it. As well as getting ready for kick-off on the pitch, they should give some thought to kicking off supporter engagement off it: it will serve them well.
Find out more about REaD Group’s suite of data cleaning and management
Data quality is more important than it has ever been. Ensuring that the customer and prospect data that you hold is accurate, up to date and compliant is a benchmark of responsible data management and marketing.
Consumers expect it, the law requires it and it delivers massive cost savings, better ROI and reduces the risk of brand damage.
A key part of maintaining the quality of the consumer data you hold is the identification and suppression of individuals who have moved from the address you have in your database – using a credible suppression file such as REaD Group’s definitive Gone Away Suppression file (GAS).
Why compromise the success of your campaigns and risk the reputation of your business by continuing to send communications to individuals using their old address?
Reduce campaign costs and improve ROI
Mailing goneaways will hit you where it hurts – in the pocket! Continuing to send mail to individuals at their old address is a waste of your marketing budget.
The following case study is based on real campaign metrics:
- Client A has a database of 1 million records selected for an acquisition mailing campaign
- Suppression flagging using the GAS file identified 10% of the individuals in the database had changed address
- That’s 100k individuals flagged and suppressed as goneaways
- Based on their pack price of £0.50 removing those goneaways saved £50,000
- Even if the response rate from those you suppress is a quarter of the rest of the file (and that is high), you are spending £50k unnecessarily and which could be deployed in better performing channels
Risk of brand damage of sending mail addressed to previous occupants
“I have received a letter to my address in someone else’s name. Please help – I am concerned someone is using my address fraudulently.”
Sending mail to old addresses risks the reputation of your organisation. At best, the receipt of mail addressed to someone not currently at the address will be the cause of irritation – and risks your mailing becoming a regular feature in the recycle bin. And worse, it is the cause of anxiety around address mis-use and identity theft.
There is always the argument that “the person who has moved in will look like one of my good prospects anyway so they will probably respond”. Actually, the chances of gaining a new customer or supporter is unlikely.
Avoiding being the cause of irritation, distress and damage to your brand’s reputation by continuing to contact individuals at their old address is easy and cost effective so why risk it?
Legal requirement under Data Protection Act 2018
Fundamentally, it is the law to keep your customer and prospect data clean and accurate. GDPR Article 5.1 (d) – entrenched in UK law as the Data Protection Act 2018 – specifies explicitly that data must be kept “accurate and, where necessary, kept up to date.”
This applies to customers and prospects data and includes ensuring address information is accurate before it is processed. By choosing not to suppress movers, you are actively breaking the law.
Losing touch with customers and supporters
We all know the relative costs of acquiring new customers or supporters versus retaining them. Flagging goneaways alerts you to the fact that a customer has moved so you have the opportunity to apply a relocation database – such as REaD’s GAS Reactive – and reduce the loss of valuable customers and supporters at their new address. Lots of your competitors are marketing to new movers, and yet they are your customer!
So, what next?
We can’t express strongly enough that the cost and risks of using old addresses will always vastly outweigh the investment in using a credible Gone Away Suppression service despite the small possibility of acquiring a new customer at that address.
Time to talk to REaD Group about applying the GAS File to your database!
Or discover more about our suite of Goneaway and Suppression products:
Consent vs Legitimate Interest:
Understanding which legal basis best suits your needs is essential! We know that both legitimate interest and consent have their benefits and downfalls when looking to communicate with consumers. However, depending on the brand, industry sector or channel of communication one or the other can play a major role in the success of the marketing strategy.
What is Consent?
Consent is when the individual has given consent in the form of an ‘opt-in’ for a company to process their personal data for a specific purpose.
Consent requires an organisation to be named at the point of data capture and the consumer must ‘opt-in’ to be contacted by the brand, with the consent statement allowing for unbundled data collection with the boxes never pre-ticked i.e consent requires a positive /affirmative action to be recorded.
It is often seen as the ‘safe’ option when it comes to collecting consumer data for marketing purposes. Whether it is using a tick box or a subscription form, consent offers the consumer a clear choice, ultimately helping to build a brand’s reputation as trustworthy, transparent, and responsible, subject to the below guidelines also being followed:
- The opt – in is a positive action – Reliant on the consumer ticking to receive communication (remember, no pre ticked boxes)
- The statement of consent is clear and unambiguous
- All third-party data controllers are named
- Information on how to withdraw consent is clear and easy to find
- The communication methods and content addressed to the consumer must then fulfil the purposes stated when consent with given
Consent is only one of the lawful bases under which companies can collect consumer data. It gives consumers a choice whether to be communicated with, and by which channel, and ultimately can build a more trusting relationship when it comes to data transparency.
Remember – when data is collected via consent, and the purpose of collecting that data remains the same, it can then also be used under the legal basis of legitimate interest.
What is Legitimate Interest?
Legitimate interest is when you or a third-party have a genuine reason that makes processing the data necessary, and there are no other interests that outranks your business interest. For example, your organisation may be able to demonstrate a legitimate interest in marketing your goods to existing customers in order to increase sales.
Legitimate interest is another of the six lawful bases for processing consumer data for marketing purposes, in line with the ‘lawfulness, fairness and transparency’ regulations. However, whereas consent is centred around a purpose, legitimate interest is more flexible and can apply to a wider range of consumer communications where needed.
When using consent, the consumer’s relationship with the brand is balanced and based on a transactional agreement. When using legitimate interest, the purposes are often less transparent to the consumer but offers more flexibility for marketing purposes. You can rely on using legitimate interest, if you can show how your use of the consumer data is proportionate, has a minimal personal impact and the consumer is unlikely to be surprised or object to what they receive.
To be clear, within the GDPR itself, Direct Marketing is specifically singled out as a legitimate interest. It is important to note however, that unlike data which has been captured under consent, once data is collected under that basis of legitimate interest it cannot then be used for consent-based marketing.
How to apply a Lawful Bases:
Most lawful bases require that processing is ‘necessary’ for a specific purpose. If you can reasonably achieve the same purpose without the processing, you won’t have a lawful basis. Remember, you must determine your lawful basis before you begin processing, and you should document it. Take care to get it right first time – you cannot swap to a different lawful basis at a later date without good reason.
Your privacy notice should include your lawful basis for processing as well as the purposes of the processing. If your purpose does change, you may be able to continue processing under the original lawful basis if your new purpose is compatible with your initial purpose (unless your original lawful basis was consent). If you are processing special category data, you need to identify both a lawful basis for general processing and an additional condition for processing this type of data.
Overall, both consent and legitimate interest serve a purpose. Consent builds a level of trust and brand awareness whilst enabling communication to consumers. Legitimate interest on the other hand, helps brands target a broader consumer or prospect base. There is no one size fits all when it comes to collecting data, so when choosing a lawful basis take care and don’t be afraid to ask for advice!
Check out more of our blogs on lawful bases or get in touch today for advice on data protection: