GDPR and phoenix customer databases – can success rise from the ashes?

Toni Sekinah, research analyst and features editor, DataIQ

In the wake of GDPR enforcement, stories are starting to emerge of companies taking drastic action with their customer databases in order to be compliant of the new regulation. Toni Sekinah takes a look at what some brands have done and how those actions may affect their customer engagement going forward.

There were many dire warnings during the run-up to the GDPR enforcement date, that many brands would send the customers in their data an opt-in request to consent to remain on the database.

Dramatic volanic ash cloudTwo days before the deadline, Car Dealer Magazine published a warning from an automotive retail solutions provider MotorVise, which claimed that many customer databases of automotive retailers could be rendered useless.

MotorVise’s director and owner Fraser Brown said that many automotive retailers were being misguided and advised to send consent emails with a 12-box opt-in form. He added that research indicated that less than 20% of customers would interact with such communication and so: “Dealer groups across the UK are now undertaking database suicide.”

One company that has been hit hard by its attempt to stay on the right side of the new regulation is Sheffield-based Vertebrate Publishing. Managing director Jon Barton told The Star that after three weeks researching the new regulation, the company deleted its database of 8,500 customers. Since then 1,000 have re-subscribed. Barton said he erred on the side of caution, as he could not be certain of the provenance of some of those customer records. He said:  “I think it will cost us money.”

Ipswich-based NOMAD Sea Kayaking tweeted on 29th May in a message titled ‘GDPR and YOUR PRIVACY’ that it has deleted its entire database of 1,300 customers. The tweet also called for former customers to re-subscribe through the website.

NOMAD Sea Kayaking tweet about deleting customer database

These companies are following in the footsteps of JD Wetherspoons pub company which deleted its entire customer database in July 2017. It was estimated to contain over 650,000 customer details.

A spokesperson for Wetherspoon’s told WIRED that following a data breach in December 2015, the pub company had been reviewing the data it held. They said: “The less customer information we have, which is now almost none, the less risk associated with data.” The big difference here though, is that Wetherspoons is reducing its digital communication with its customers to radio silence – in April 2018, the company deleted its social media accounts.

Two women in a barRachel Aldighieri, managing director of the Direct Marketing Association (DMA) indicated to DataIQ that starting a database again from scratch could be a way to eliminate non-responsive contacts from a database. She said: “The GDPR will undoubtedly mean some businesses are not able to use data they may have in the past, but this also means that data they do now have available will be better quality.”

She also suggested that businesses should think of innovative new ways to connect to customers. “Senior management should work with their marketing and creative teams to diversify their approach from the competition and be innovative,” she said. Aldighieri added: “Businesses should also be using their available marketing platforms, such as creating new website content and social media posts, to clearly state what data sharing can offer new and existing customers.”

More reports of a smaller databases rising from the ashes of their predecessors are likely to emerge in the coming weeks and months. The examples mentioned above are relatively small and there are almost certainly cases of larger companies who have had low re-permissioning response rates. Exact details will surface eventually and that is when we will find out how much more engaged, if at all, the customers are in the smaller, newer databases.