What is GDPR and How Does It Impact Your Business?

What is GDPR and How Does It Impact Your Business?

Post summary:

  • What is GDPR?
  • The business implications of GDPR
  • The impact of GDPR on customer engagement

The internet has dramatically changed the way we communicate and how we handle everyday tasks.

We send emails, we share documents, we pay bills and we purchase goods by entering our personal details all online and without a second thought.

Have you ever stopped to wonder how much personal data you have shared online?

Or what happens to that information?

We’re talking about banking information, contacts, addresses, social media posts, and even your IP address and the sites that you’ve visited are all stored digitally.

Companies tell you that they collect this type of information so that they can serve you better, offer you more targeted and relevant communications, all to provide you with a better customer experience.

But, is that what they really use the data for?

This is the question that has been asked and answered by the EU, and why in May 2018 a new European privacy regulation called GDPR will be enforced and permanently change the way you collect, store and use customer data.

In a study of more than 800 IT and business professionals that are responsible for data privacy at companies with European customers, Dell and Dimension Research found that 80% of businesses know few details or nothing about GDPR.

But, perhaps worst of all is that 97% of companies don’t have a plan in place for when GDPR kicks off in 2018 (Tweet this!).

Is your organization prepared for GDPR and the May 2018 deadline?

That’s why today, we will explain what is GDPR, how it will impact your business and include practical tips on how you can start preparing for GDPR.

What is GDPR?

On May 25, 2018, a new European privacy regulation called The General Data Protection Regulation (GDPR) will come into effect.

This regulation will be implemented in all local privacy laws across the entire EU and EEA region. It will apply to all companies selling to and storing personal information about citizens in Europe, including companies on other continents. It provides citizens of the EU and EEA with greater control over their personal data and assurances that their information is being securely protected across Europe.

According to the GDPR directive, personal data is any information related to a person such as a name, a photo, an email address, bank details, updates on social networking websites, location details, medical information, or a computer IP address.

There is no distinction between personal data about individuals in their private, public or work roles – the person is the person. Also in a B2B setting, everything is about individuals interacting and sharing information with and about each other. Customers in B2B markets are obviously companies, but the relationships that handle the business topics are people – or individuals.

Under the GDPR, individuals have:

  1. The right to access –this means that individuals have the right to request access to their personal data and to ask how their data is used by the company after it has been gathered. The company must provide a copy of the personal data, free of charge and in electronic format if requested.
  2. The right to be forgotten – if consumers are no longer customers, or if they withdraw their consent from a company to use their personal data, then they have the right to have their data deleted.
  3. The right to data portability – Individuals have a right to transfer their data from one service provider to another. And it must happen in a commonly used and machine readable format.
  4. The right to be informed – this covers any gathering of data by companies, and individuals must be informed before data is gathered. Consumers have to opt in for their data to be gathered, and consent must be freely given rather than implied.
  5. The right to have information corrected – this ensures that individuals can have their data updated if it is out of date or incomplete or incorrect.
  6. The right to restrict processing – Individuals can request that their data is not used for processing. Their record can remain in place, but not be used.
  7. The right to object – this includes the right of individuals to stop the processing of their data for direct marketing. There are no exemptions to this rule, and any processing must stop as soon as the request is received. In addition, this right must be made clear to individuals at the very start of any communication.
  8. The right to be notified – If there has been a data breach which compromises an individual’s personal data, the individual has a right to be informed within 72 hours of first having become aware of the breach.

The GDPR is the EU’s way of giving individuals, prospects, customers, contractors and employees more power over their data and less power to the organizations that collect and use such data for monetary gain.

The Business Implications of GDPR

This new data protection regulation puts the consumer in the driver’s seat, and the task of complying with this regulation falls upon businesses and organizations.

In short, the GDPR applies to all businesses and organizations established in the EU, regardless of whether the data processing takes place in the EU or not. Even non-EU established organizations will be subject to GDPR. If your business offers goods and/ or services to citizens in the EU, then it’s subject to GDPR.

All organizations and companies that work with personal data should appoint a data protection officer or data controller who is in charge of GDPR compliance.

There are tough penalties for those companies and organizations who don’t comply with GDPR fines of up to 4% of annual global revenue or 20 million Euros, whichever is greater.

Many people might think that the GDPR is just an IT issue, but that is the furthest from the truth. It has broad-sweeping implications for the whole company, including the way companies handle marketing and sales activities.

The Impact of GDPR on Customer Engagement

The conditions for obtaining consent are stricter under GDPR requirements as the individual must have the right to withdraw consent at any time and there is a presumption that consent will not be valid unless separate consents are obtained for different processing activities.

This means you have to be able to prove that the individual agreed to a certain action, to receive a newsletter for instance. It is not allowed to assume or add a disclaimer, and providing an opt-out option is not enough.

This changes a lot of things for companies such as the way your sales teams prospect or the way that marketing activities are managed. Companies will have to review business processes, applications and forms to be compliant with double opt-in rules and email marketing best practices. In order to sign up for communications, prospects will have to fill out a form or tick a box and then confirm it was their actions in a further email.

Organizations must prove that consent was given in a case where an individual objects to receiving the communication. This means that any data held, must have an audit trail that is time stamped and reporting information that details what the contact opted into and how.

If you purchase marketing lists, you are still responsible for getting the proper consent information, even if a vendor or outsourced partner was responsible for gathering the data.

In the B2B world, sales people meet potential customers at a trade show, they exchange business cards, and when they come back to the office, they add the contacts to the company’s mailing list. In 2018, this will not be possible anymore. Companies will have to look at new ways of collecting customer information.

Initial preparations for May 2018

A key component of the GDPR legislation is privacy by design.

Privacy by design requires that all departments in a company look closely at their data and how they handle it.  There are many things a company will have to do in order to be compliant with GDPR. Here are just a few first steps to help get your started.

1. Map your company’s data

Map where all of the personal data in your entire business comes from and document what you do with the data. Identify where the data resides, who can access it and if there are any risks to the data.

2. Determine what data you need to keep

Don’t keep more information than necessary and remove any data that isn’t used. If your business collects a lot of data without any real benefit, you won’t be able to do this in a GDPR world. GDPR will encourage a more disciplined treatment of personal data.

In the clean-up process, ask yourself:

  • Why exactly are we archiving this data instead of just erasing it?
  • Why are we saving all this data?
  • What are we trying to achieve by collecting all these categories of personal information?
  • Is the financial gain of deleting this information greater than encrypting it?

3. Put security measures in place

Develop and implement safeguards throughout your infrastructure to help contain any data breaches. This means putting security measures in place to guard against data breaches, and taking quick action to notify individuals and authorities in the event a breach does occur.

Make sure to check with your suppliers also. Outsourcing doesn’t exempt you from being liable. You need to make sure that they have the right security measures in place also.

4. Review your documentation

Under GDPR, individuals have to explicitly consent to the acquisition and processing of their data. Pre-checked boxes and implied consent will not be acceptable anymore. You will have to review all of your privacy statements and disclosures and adjust them where needed.

5. Establish procedures for handling personal data

As we mentioned earlier, individuals have 8 basic rights under GDPR.

You will need to establish policies and procedures for how you will handle each of these situations.

For example:

  1. How can individuals give consent in a legal manner?
  2. What is the process if an individual wants his data to be deleted?
  3. How will you ensure that it is done across all platforms and that it really is deleted?
  4. If an individual wants his data to be transferred, how will you do it?
  5. How will you confirm that the person who requested to have his data transferred is the person he says he is?
  6. What is the communication plan in case of a data breach?

Conclusion

Data is a valuable currency in this new world.

And while GDPR does create challenges and pain for us as businesses, it also creates opportunity.

Companies who show they value an individual’s privacy (beyond mere legal compliance), who are transparent about how the data is used, who design and implement new and improved ways of managing customer data throughout its life cycle build deeper trust and retain more loyal customers.

The May 2018 deadline may seem a long way off at the moment, but before you know it, a year will have passed. If you haven’t already started your journey, we urge you to start now.

Dedicate time to understand what you need to do in order to become compliant and use the practical tips shared in this article to help you get started. Then, create a plan of action for your journey to GDPR so that when May 2018 rolls along you’re calm and relaxed and you can answer all your customers’ questions regarding compliance.

How will GDPR impact your business?

And what are you doing right now in order to be GDPR compliant by May 25th, 2018?

Let me know in the comment section below.

P.S. If you’re interested to know more about how GDPR affects your customer data, then contact us today.

GDPR for Customer relationships

Disclaimer: The content in this blog post (including all responses to comments) is not to be considered legal advice and should be used for information purposes only.

CRM

About Jennifer Lund

Jennifer Lund

Jennifer Lund is the Director of Marketing at SuperOffice. Jennifer loves all things digital marketing and works out of the SuperOffice headquarters in Oslo. You can connect with Jennifer on Twitter @jenniferlund.

47 Comments

Piason Viriri

about 10 months ago

good material on GDPR.

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Ishmael Turay

about 10 months ago

GDPR is a very important strategy for business people as the world is now governed by entrepreneurs

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Sonal Patil

about 10 months ago

Thanks for sharing such useful information about GDPR, It gave me ideas for customer retention.

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Kaminska Zakrzewska

about 8 months ago

Nice write up on GDPR. Thanks for this comprehensive information. Loved it!

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Debbie

about 6 months ago

If a company holds a private contact list which is only used when there is need to contact an individual, does this come under the GDPR regulations? The list is held digitally but is not used for any marketing purposes or automatic processes. Despite looking I can find no reference to private lists and you thoughts would be helpful.

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Steven MacDonald

about 6 months ago

Great question, Debbie! If your private contact list includes customers, then it should be compliant with GDPR. But if they are not customers, you will most likely still need to get their consent to store the data.

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Usama NabiL

about 6 months ago

So, I got a question.. what if I am an outsource handling customers' interactions which includes my team accessing customer's private personal and financial data - Yet, I access this data through my client's system that I just got an access on it. I don't host system, I don't host servers. As well as, I don't store or backup data.. Am I still obliged or that falls under complete ownership of my client and I shouldn't change anything of what I am doing? Thanks

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Steven MacDonald

about 6 months ago

Thanks for commenting, Usama. Great question! I would suggest speaking with your clients to see what steps they are taking towards becoming GDPR compliant.

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Vicki Watson

about 5 months ago

From 25 May 2018, the EU GDPR (General Data Protection Regulation) will affect every organisation that processes the personal information of EU residents. A really interesting and insightful blog post. Tens of thousands of organisations around the world are facing a major upheaval in the way they process data. Complying with GDPR is not straightforward. It will require detailed planning and collaboration with all the businesses in your chain.

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Steven MacDonald

about 5 months ago

Well said, Vicki! Thank you for contributing with your comment.

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Peter

about 5 months ago

Our cricket association holds members email addresses as well as mobile numbers. Will come under GDPR ?

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Steven MacDonald

about 5 months ago

Thanks for the comment, Peter. Do you have consent that their information is stored?

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Anna

about 5 months ago

How about old contact information for current/former customers and/or sales contacts (from trade shows)? Will we need to send a mail out to each of them to confirm they know they are in our CRM system or will GDPR only apply to new contact information loaded?

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Steven MacDonald

about 5 months ago

Hi Anna. For customers, you should be OK, but for sales contacts, I recommend reaching out to them to gain consent to store their data. GDPR affects both new and existing customers.

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John Chapman

about 5 months ago

As a small, specialist executive search company handling a small number of assignments per year, what permissions do I need to obtain? Firstly in respect of prospective candidates' cvs that are submitted to me for consideration in respect of a particular vacancy, or generally for consideration of future opportunities. Secondly, in respect of client contacts/prospects.

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Steven MacDonald

about 5 months ago

Hi John, thanks for the comment. You will need to get consent to store any prospect or client data.

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Olivia Bridges

about 3 months ago

Hi Steven This is a really helpful summary, thank you. We are a small UK based art dealer, but we have clients in the US and outside of Europe. Do we need to gain their consent to continue to hold their client information and market to them? With many thanks in advance, Olivia

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Steven MacDonald

about 3 months ago

Hi Olivia. As far as I am aware, you do not need consent to market to clients outside of Europe.

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John Jeapes

about 3 months ago

Telephone and email lists of internal contact details provided by a customer - are these consent free under GDPR? Is it feasible that individuals can request removal, when they are a fundamental contact point to answer any question to enable contractual obligations to be managed?

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Steven MacDonald

about 3 months ago

Hi John. Any individual can request removal of their data, but when their data is tied to a contract it can be a challenge. You could always request a the contract be transferred or try to anonymize the data.

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Jonathan Hooper

about 3 months ago

We have a field sales team, all of whom have mobile phones and laptops containing various customer and prospect information (contact details etc) - will they need to seek permission before this data can be stored? What about prospects?

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Steven MacDonald

about 3 months ago

Hi Jonathan. For customers, you should be OK. For prospects, I recommend reaching out to them to ask for consent to store their data, just to be sure.

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Beth

about 3 months ago

Hi. I understand that for new/future contacts we physically need an individual to opt in - how does the new legislation apply to contacts we already have stored? The initial sign up form for these contacts had a clause at the top along the lines of 'By giving us your details you agree for us to contact you and to keep you informed about our products. We will not pass your details on to any third party.' - but no actual opt in tick box. The email communication also had an unsubscribe link. Can we continue to use these contacts or do we have to regain opt in permission? Thanks.

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Steven MacDonald

about 3 months ago

Hi Beth. If you have previously sent marketing communications to your prospect list, then you do not need to reconfirm their opt-in - providing there has always been an option to opt-out of further messages.

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Debbie

about 3 months ago

How will GDPR affect direct postal mail shots from pre purchased mailing lists? Does consent have to be re-obtained by the company who has purchased a list before any customer interaction can begin?

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Steven MacDonald

about 3 months ago

Good question, Debbie. To be honest, I'm not sure how GDPR affects direct mail.

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Jayaraj Chanku

about 2 months ago

Excellent content regarding GDPR. In this world based on data, GDPR plays an important role in protecting and securing it. Nice post!

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David Lawrence

about 2 months ago

Hi Jennifer, Thanks for providing such informative post about GDPR - it really helps business owners who are preparing their business across globe for the May 25th deadline.

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Mark Day

about 2 months ago

Hello Very informative thank you Someone asked the question about using the details from a business card as not consent. Would the same apply to an email , i.e if Bert forwarded a Freds email details to someone else for the purpose of recommending that person as a potential customer or lead for him to follow up , this would need consent from that contact yes ?

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Steven MacDonald

about 2 months ago

Hi Mark. In this case, I recommend speaking to the person on the phone first before you store their details.

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JP

about 1 month ago

Great comments Steven and responses. We have a 20 year old database with thousands of contacts, 75% prospects, and a team of cold callers / warm callers etc, as is typical with many companies. Will we still be able to email them and make cold calls? Or is the whole point that they need to opt in for us to do this.

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Steven MacDonald

about 1 month ago

Thanks, JP! If people on your list have already received email campaigns from you in the past, then it should be OK to continue sending them under GDPR. But, I would suggest that you offer those who haven't received an email in the past the chance to opt-in for future emails.

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Rikard

about 1 month ago

Hi Steven, thank you for many good responses here. I think we all are very uncertain on how to behave towards non-customers. We are a software company with a few customers and even more prospects. The prospects have been found using different products like LinkedIn etc. We have sent "cold e-mails" to these, and some of them have responded and are interested / semi-interested in our products. These are now stored in SuperOffice, but can we keep them? Or should we send them an e-mail telling we have stored them and they need to give us their consent?

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Steven MacDonald

about 1 month ago

Hi Rikard, thank you for leaving a comment. Yes, there's a lot of uncertainty around GDPR! Cold emailing is fine, so you can continue to do this.

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Rikard

about 1 month ago

Thank you Steven for your clarification. This raises another question; You say Cold e-mailing is fine, but storing the prospects for these cold e-mailing is not fine? Or would you say we can store them but we should delete them after a certain amount of time?

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David Morgan

about 1 month ago

Hi Steven, very informative with some extremely helpful questions and replies. Thank you. With the deadline looming, I'm still unsure as to my next steps re. GDPR compliance. I run a Ltd. company, a Learning & Development consultancy, working both directly through my company and as an Associate for others businesses e.g. training brokers. My company employs only me. I hold current and past customer contacts along with business address, email and telephone details. That's all I have. The contacts reside on my PC and Mobile Phone and not in the cloud. Your thoughts on where I stand with GDPR and the need to obtain consent from current and past customers would be appreciated.

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Steven MacDonald

about 1 month ago

Hi David, thanks for commenting and I most definitely understand your concerns here. Providing customer data is stored securely and that if any former customers ask you to remove/ delete their data and you can prove you have done it, then you should be fine to continue the way you do today.

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Rikard

about 1 month ago

Hi Steven, we can still continue doing "cold e-mailing" but we can't store the prospects in SuperOffice without their consent? Can you explain a little more around this? Thank you for your help!

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Natasha Burke

about 1 month ago

Hi Steven, Very informative article. I do have a few questions: We are a small company in the EU with 15+ employees and have about 6 remote employees in and around other non-EU countries. - How will GDPR impact us due to this? - What will our (company's) role in GDPR be towards our customers? - Is it a problem with having employees/contractors outside of EU? - What steps should we take to incorporate GDPR in the company and work with EU and non-EU companies and contractors?

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Steven MacDonald

about 1 month ago

Hi Natasha, thanks for commenting. As these GDPR-related questions are very specific to your business, I recommend that you speak with a lawyer. They can provide you with the answers you need.

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Tammy

about 4 weeks ago

Hi We are a freight forwarding / shipping company. We process requests to ship goods all over the world. We only collect name, address and number of the shipper and the name address and number of the receiver. This data is then obviously given to the shipping line and import export. Do we have to record this information and especially the outside EU companies and ports how do we make sure they are complying with the GDPR as it is not there legal system - if they do not comply does that mean we can not longer use them for shipping or import export offices?

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Steven MacDonald

about 4 weeks ago

Great question, Tammy. I suggest you speak with a legal team on this one.

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Tammy

about 4 weeks ago

Hi Natasha We are in the same position. We are a freight forwarders and shipping company so we collect name and address of who we ship for and the details of who we are shipping to and these are in countries all over the world. Obviously we have to share these details with customs and the shipping lines- but like your company they are not in teh EU so how do we make sure they are being compliant with the data we have handed over. We are processing data of people with in the EU so we have to conform but no idea how??

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Tony

about 2 weeks ago

In our business a number of people use their contacts on their business phone to include personal contacts as well as customers and suppliers. Do we need to do anything about these personal contacts?

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Steven MacDonald

about 1 week ago

Hi Tony, thanks for leaving a comment! Can you share a few more details here? Not sure I fully understand the question.

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emmy hughes

about 1 week ago

Hi I am self employed and run an extra tuition service. Parent's details are on my phone in text messages and in a paper based filofax. I lease a photocopier to copy work and books for the kids but the company is telling me i need to pay £60 a month or a new security device on the copier for it to ensure im compliant but I do not use it to process personal details- I scan maths work and send it to the hard drive of my laptop or photocopy books. Please advise as they are saying I need to pay it or I will be fined? Thanks!

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Steven MacDonald

about 1 week ago

Hi Emmy! Great question. To be honest, I'm not sure how to answer this, so I suggest you speak with a lawyer, just to be sure.

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