by Paul Jacobson (@pauljacobson) Trust is gravity in social engagement. Digital marketing’s purpose may seem to be persuading customers to buy a brand’s products and services but I am beginning to think that is just a by-product of digital marketing’s true purpose.
Granted, it is an important by-product, but as new laws such as the Protection of Personal Information (POPI) Act loom on the horizon and new regulatory models such as the Treating Customers Fairly (TCF) framework begin to permeate the financial services industry, marketers have to start thinking about the bigger picture.
A profound impact
The POPI Act is going to have a profound impact on virtually all industries.
As you probably already know, the act governs what can be done with personal information and how it can be processed. Its processing conditions outline the general framework for almost all personal-information processing activities, and one of the strong trends that emerge from a careful reading between the statute’s lines is that transparency is a core value.
POPI emphasises the need to be transparent about different stages of personal-information processing, even as it subverts consent as a primary justification for processing personal information. You would be forgiven for being under the impression that, as long as you are transparent, you can do far more with personal information than you may have thought previously.
Makes up for a lot
It isn’t quite a Get-Out-Of-Jail-Free card but it makes up for a lot.
Transparency isn’t just important in the context of the POPI Act. The TCF framework is a regulatory and compliance framework which the Financial Services Board has introduced into its regulatory and supervisory function recently
As the framework’s name suggests, this is about treating customers fairly. It assesses risk in the financial services industry based on firms’ conduct towards customers, rather than more traditional structural risks to the firms themselves.
In other words, firms’ conduct determines their risk profiles and may even help reduce their more traditional prudential risks.
Six outcomes
TCF has six outcomes, the most important of which is the first one, which states that:
Customers are confident that they are dealing with firms where the fair treatment of customers is central to the firm culture.
This first outcome is so important that achieving the remaining five largely depends on whether a firm achieves the first.
Firms in the financial services industry recently completed a self-assessment questionnaire which gave a certain amount of insight into their assessment of their implementation of the TCF framework. Almost across the board, they reported that the first outcome was the most challenging of the five.
Qualitative measuring a challenge
One of the challenges is qualitatively measuring how confident customers are “that they are dealing with firms where the fair treatment of customers is central to the firm culture”. This is important because firms are required to align their remuneration and reward models with their compliance with the TCF framework.
Of course, this is something digital marketers have been working towards for some time now — qualitatively measuring customer sentiment and efforts to improve it. Given the emerging regulatory environment with its emphasis on customer confidence and transparency, digital marketers have a tremendous opportunity to up their game, so to speak, and explore how they can use their social engagement tools to help support their clients’ compliance programmes.
Subtle shift in emphasis
A likely outcome is a subtle shift in emphasis. Effective social engagement (as a marketer’s core function) is to engender in customers trust and a greater confidence that the company is committed to treating them fairly and is being transparent about how it processes their personal information, among other things.
Increased sales, improved sentiment and customer loyalty are almost incidental to this, while being central to a firm’s continued viability, at the same time.
As this shift occurs, digital marketers become more than sales agents — they become essential partners in their clients’ continued sustainability.
Paul Jacobson (@pauljacobson) is the founder and director of Web•Tech•Law. He contributes the regular “Tech Law” column focusing on issues in the digital marketing space to MarkLives.com. CC BY-SA 2.5
— MarkLives’ round-up of top ad and media industry news and opinion in your mailbox every three work days. Sign up here!