GDPR: The Upside

Posted by Guy Hanson on

There has been a great deal of focus on the challenges for data owners in general,—and marketers in particular—that Europe’s new General Data Protection Regulations (GDPR) will pose. However, there has been less focus on the potential upside that better data quality, more robust consent, and greater transparency will deliver improved program performance. Consumers will also have stronger trust in senders and will be more likely to respond to their offers.

This should be common sense because especially in the world of email, GDPR is simply writing acknowledged best practices into law. For example:

  1. Improved data quality will yield significant financial benefits. According to the Royal Mail research, the average cost of poor-quality customer data to UK organizations currently averages 5.9 percent of a typical business’s annual revenue.
    • In the DMA’s recently released 2018 Marketing Email Tracker report the average lifetime value of an email address was calculated at £28.56. For email program owners, a lower opportunity cost from reduced bounces, opt-outs, and complaints is going to mean increased program value.
  2. Consent under GDPR requires positive opt-in. Guidance from the Information Commissioner’s Office (ICO) is: “don’t use pre-ticked boxes or any other method of default consent.”
    • Several years ago Clickz produced research that showed performance for opt-in vs opt-out programs was significantly better in terms of open rates (82 percent higher) and click rates (slightly more than double). This uplift held true even in absolute terms, despite the opt-out programs sending an average 43 percent more traffic.
  3. Consumer Trust will also increase. In the DMA’s Consumer Attitudes to Data report the most common response (58 percent) to the question “what makes you happy to share your personal information with a company?” was “I trust the organization.”Top reasons for consumers to trust a company include:
    • Transparency about how their data is collected and used
    • Benefits for sharing their data are made explicit at the start
    • Terms and conditions are easy to read and understand
    • A flexible privacy policy allowing control over types/amount of data shared
    • The link between the data shared and benefits provided is clear
    • Easily able to contact the data controller.

These expectations are closely aligned with GDPR, meaning greater trust between consumers and brands will be a likely benefit. Trust—in turn—means more subscribers will provide a primary email address (the one they most actively engage with) and Return Path research shows 83 percent of all email reads come from these addresses.

So, it all sounds great in theory, but are these benefits being seen in practice? To answer this question, let’s look at a few email programs that have already been preparing for GDPR:

Manchester United Football Club
Man Utd is currently re-permissioning its entire email database, and fans at their home matches have even been seeing the following on the advertising hoardings:

They have seen a clear benefit since they started the re-permissioning exercise in December 2017. Spam complaint rates from their program have reduced to ⅕ of their previous level, indicating a significant rise in positive engagement.

 

The North Face
This email program ran a one-off re-permissioning campaign in early February:

They appear to have lost around of their email data, but have seen a big uplift in performance from their remaining subscribers:

Average read rates have more than doubled, while their average spam placement rate has reduced by . Another very positive development for North Face is that their “this is not spam” notifications have increased six-fold. Their more engaged subscribers are actively checking their spam folders for missing emails, and this behavior sends very positive signals to major mailbox providers such as Microsoft and Gmail.

Royal Society for the Protection of Birds
RSPB re-designed their sign-up form to be GDPR compliant, and this new version was launched in November 2017

Rachel Whitter, RSPB’s Email Channel Manager, was kind enough to share some program performance data with me, and it tells a really great story!

Comparing the four-month period before the new sign-up form with the four-month period post-deployment, we can see that RSPB’s open rates have increased by almost 1/6 while click rates have almost doubled—a testament to the even more engaged audience they are now building.

There appears to be plenty of early evidence that email program owners are benefiting from the additional transparency and granularity GDPR requires. New subscribers are more primed to engage, and this will have highly positive implications. More opens and clicks are going to mean more traffic and conversions—and we are seeing these in absolute terms, not just percentages. This not only means more immediate revenue but also extended lifetime value, meaning significant increases in the overall value of these programs.


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About Guy Hanson

Guy is a passionate advocate for intelligent use of customer data to drive responsive email programs. With a knowledge base that now spans nearly 15 years, he is a global e-mail expert and thought leader. Leading Return Path’s International Professional Services consulting team, Guy has worked with a broad range of clients across 5 continents to improve their email delivery, subscriber engagement and revenue generated. Outside of work, Guy is the Chairman of the DMA Email Council. In this role, he works with industry peers including brands, agencies, and service providers to promote the best interests of the email industry to a broader audience. He is also a regular contributor to the industry press.

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