Data could be your biggest asset but it could also be your weakest link. The more you collect, the more there is to be guarded, the more to be held accountable for, the more to sift through to find something of value. With increasing customer awareness and a growing need for greater control over personal data, it’s never been more critical for SaaS providers to reassess how much of what’s collected can even be meaningfully analyzed? Data minimization is not a trend, it’s a strategic priority that translates into a distinct business advantage,
More isn’t always better, intentionality always is
Organizations around the world collect heaps of customer data— some of which proves to be crucial for decision making while the rest may sit unused in anticipation of future use. Extracting valuable insights from such a vast expanse of data is, in itself, challenging— like finding a needle in a haystack, so to speak. As much as 60-73% of all data within an enterprise is left underutilized for analytics, according to research. Indeed, service providers should get pickier and more intentional about the customer data they collect and store.
The onboarding process is often the most crucial touchpoint for new customers. Initial interactions customers have with the service can make or break their entire experience. For instance, a sign-up interface overloaded with too many input fields is likely to make users stop in their tracks and wonder, do I really need to provide all this information just to sign up? The inconvenience aside, security concerns are a major factor that often lead to users abandoning online forms. This is not surprising, given how much more aware users are of privacy than ever before, wanting as much control over what they share and with whom.
If service providers wonder whether users would even notice if they are being minimal with the data they ask for, the answer is a resounding yes. A Mckinsey survey found that 87% of North American respondents would avoid engaging with a company if they had concerns about its security practices. The survey also found that consumers are more likely to trust companies that request only relevant information or limit the amount of personal data they ask for. Users are averse to entitlement, and they appreciate intentionality.
Consider how something as simple as gradual data gathering makes the sign up process feel easy and stress-free for users, as they don’t want to be rushed or feel pressured to share their details from the get go. This approach builds trust by clearly demonstrating respect for user privacy and encouraging engagement without the fear of oversharing. While mapping out user journeys, it’s helpful to step into the users’ shoes and consider whether they might second-guess their decision to share any specific detail. By identifying potential moments of hesitation or discomfort, service providers can refine the process to ensure it feels intuitive, transparent and respectful of their privacy.
Data is a high-stakes game
Consumers’ concerns about security are extremely valid. Recently, a massive data breach exposed the personal records of 2.9 billion people. Moreover, Gartner predicts that by 2025, software supply chain attacks will have impacted 45% of organizations globally. In addition to reputational damage, organizations also face hefty fines for failing to protect user data, as privacy regulations like GDPR and CCPA impose strict penalties for non-compliance and breaches.
Collecting and storing only the data that is absolutely necessary reduces the amount of sensitive information at risk in the event of a breach. Less data stored means there is less for attackers to exploit. Reducing the number of potential vulnerabilities that attackers can target is crucial here. Especially for smaller SaaS providers who may lack the resources for sophisticated security infrastructures, keeping the data they store to a minimum makes it easier to secure, monitor and manage.
At the same time, when users see that only essential information is collected, it reassures them that their privacy is not infringed upon, alleviating security concerns regarding the service they want to use and fostering greater confidence in the provider.
Collect only what you really need and make a plan for it
There is no one way to approach data minimization. Service providers could simply start with a bit of introspection. How effectively is data governance managed internally? Are we collecting more information than necessary? What data can we do without, and how might removing it impact our operations?
For startups, zeroing down on goals and assessing what data points will be essential to achieve them is a good starting point. On the other hand, reverse engineering with the data points you already have will help eliminate unnecessary data collection. For example, what value does collecting a user’s employment status provide? By focusing only on the essential data, service providers can streamline the process and ensure they’re collecting only the information that adds value. Nothing more, nothing less.
Cutting down on data doesn’t mean that you’re working in the dark. It’s more like shedding light on what truly matters, allowing you to focus on the insights that drive value. Service providers can achieve minimisation without sacrificing functionality. For instance, standard options like “Log in with Google/Microsoft/Facebook” have made it easier for users to access multiple services without adding to their list of passwords. However, it’s now possible to take this a step further by moving towards reusable accounts. Instead of creating new accounts for each new subscription or when accessing data, this approach extends reusability, offering both service providers and consumers a more streamlined and efficient way to handle authentication and access control.
The account being reusable across all services ensures that the users’ personal information stays secure, without the risk of numerous third parties handling the data separately. In turn, this substantially reduces the number of places user data is stored, lowering the chances of it being compromised. This way, users can also enjoy a greater degree of control over their information, as they can easily update or modify their credentials across all services, without needing to do it individually for each provider
Working with only what’s necessary frees up resources and mental space, allowing room for creativity and innovation. With a clearer focus, SaaS providers can explore new ways to enhance user experience, redefine product offerings, and even discover new opportunities that might have been overlooked amidst the clutter. By shifting the perspective on data minimization from merely a legal precaution to a strategic advantage, you begin to see the full breadth of its opportunities.
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