Privacy will reinforce hyper-personalized customer experiences (2023 Prediction #7)

Since the inception of omnichannel over a decade ago, the “holy grail” for customer experience (CX) has been to gain enough insight into a customer/client/citizen to provide personalized engagement through any channel specific to an individual’s needs. This rapacious demand for insight spurred exponential growth in third-party activity tracking cookies (i.e., small blocks of data attached to a website, cataloguing a person’s behavior) across websites, social networks, and mobile applications.

An ecosystem of third-party data aggregators grew to meet demand, but this all changed with the onset of laws like the EU’s General Data Protection Regulation (GDPR) in 2018. This law had a permanent impact on the use of third-party cookies and, it can be argued, instigated their decline. In the years since, companies like Apple have blocked them through its intelligent tracking prevention (ITP) feature, and Google has targeted late 2023 / early 2024 to phase out their use of them. This will cause significant difficulty for many organizations relying on them to gain insight into customers/clients/citizens and drive more personalized CX engagements. PAC believes that the overreliance on the plethora of insight gained from third-party cookies exposes many organizations to a painful CX transition if not addressed in 2023. Organizations have become far too reliant on this type of insight to drive CX personalization, and there is yet to be an obvious replacement that provides the levels of privacy that people and governments now expect.

However, whilst CxOs in many organizations will continue to need assistance in this transition, there are opportunities for personalized CX to become more sophisticated whilst respecting privacy. The decline of access to third-party data specific to the behavior of individuals reinforces the importance of first-party data to drive CX. PAC considers that many organizations have become too reliant on third-party data to strengthen data quality issues regarding first-party data. However, for those organizations with high-quality first-party data, there is an opportunity to obfuscate or anonymize it so it can be sold as insight to other organizations to compare patterns in third-party to first-party CX data to infer intent, behavior, and sentiment further. PAC predicts that despite the decline of third-party data that can identify an individual’s behavior, privacy adherence will drive a new ecosystem of obfuscated/anonymized third-party data that meets privacy demands but is used to further reinforce first-party insight into an individual’s behavior to provide hyper-personalized customer experiences in 2023 and beyond.

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This blog is part of a series of PAC’s 2023 Top 10 predictions. Click here to see our 10 predictions