![Customer data protection: 12 ways to keep your data safe [2025]](/studio/assets/5015bdfe66cd100dc2a2d389b9c40f1cf8d2f051-2016x1008.webp?w=1440&fm=webp)
Customers actively seek personalized experiences from businesses they interact with. In response, companies have started collecting and using customer data to excel in personalization and eventually improve overall customer experience.
However, without proper data protection measures in place, businesses risk exposing this valuable information to potential threats such as cyberattacks. Such breaches not only endanger customers but also pose significant challenges to the businesses themselves
According to a McKinsey study, 87% of respondents would avoid companies with security concerns, and 71% would stop doing business with a company after a data breach. Given that any laxity in protecting customer data can erode your customer trust and hinder business growth. So, securing customer data is not just a nice-to-have but a necessity.
So, how do you strike the perfect balance of delivering personalized experiences while safeguarding their data and your reputation?
This guide will explain why consumer data protection is important and equip you with strategies for safeguarding it.
Key pointers
- Customer data protection refers to the strategies every business should follow to secure sensitive customer information with confidentiality and limited access. These strategies protect your business against breaches, theft, and misuse, enabling you to deliver personalized customer experiences while maintaining customer trust.
- When protecting customer data is essential for building trust and delivering personalized experiences, it should comply with regulations like GDPR and CCPA. It’s not just about avoiding penalties; it’s about creating a secure foundation in a customer-focused market driven by responsible data usage to strengthen loyalty and confidence.
- Businesses should safeguard all types of customer data, like personal, financial, behavioral data, intellectual property, and health records. Comprehensive protection of these data prevents breaches, identity theft, and reputational damage, securing customer trust and safety.
- While businesses are prone to cyberattacks, following data protection best practices is important. These include encryption, regular audits, access control, employee training, collecting only essential data, avoiding silos, and having clear incident response plans. Implementing these measures helps protect against cyberattacks.
Why should you protect customer data?
Protecting customer data is necessary to deliver a seamless, trustworthy, and personalized customer experience. With AI-driven personalization continuing to shape customer-centricity, protecting customer privacy has now become a competitive advantage.
Customer data protection helps build customer loyalty
In the era of data breaches, customers are increasingly drawn to businesses that not only proactively protect their data but also react to sketchy activities. 46% of people say they choose to buy a product only when they are confident in a company’s data protection practices. So, companies that prioritize data protection can foster customer loyalty in the long term.
Customer data protection ensures legal compliance
With stringent data privacy laws worldwide, such as GDPR, CCPA, and HIPAA, businesses must mandate these laws to protect customer data and ensure privacy and transparency. According to the Pew Research Center, 72% believe there should be more regulation than now.
Customer data protection safeguards business reputation
When customers trust that their personal information is secure, they are more likely to engage and remain loyal. A strong data protection strategy not only ensures compliance with legal regulations but also demonstrates a commitment to transparency and accountability. By prioritizing customer data security, businesses can prevent breaches that could lead to financial losses, legal complications, and damage to their reputation.
What are the types of customer data to be protected?
The major types of customer data businesses should protect include personal, financial, account details, health, behavioral, and intellectual property. A thorough data protection strategy ensures all data is safeguarded as a whole, not just prioritizing one type. Let’s explore the information covered under each data type below:
- Personal information: The information that identifies an individual, such as their name, address, social security number, phone number, birth date, and more.
- Financial Information: The information includes credit card numbers, bank accounts, and other financial information.
- Intellectual property: Data that includes the company’s ideas, processes or inventions, patents, trade secrets, and more.
- Account credentials: Passwords help you access all your online accounts, from social media to banking.
- Health records: Records containing sensitive information, including diagnoses, treatments, and medications.
- Behavioral data: The data about the customer’s behavior online, like past purchases, time spent on pages, visits, content interaction, preference, and more, should be encrypted.
How to protect customer data: 12 tips you shouldn’t miss
Protecting customer data is a process of adopting key strategies, such as understanding data compliance, evaluating third-party vendors, collecting only essential data, and keeping software up to date. Other measures include end-to-end encryption, eliminating unnecessary data, conducting audits, employee training, and more.
Here are the 12 best data privacy practices you should know to protect your customer data.
Understand the data compliance | Evaluate your third-party vendors |
|---|---|
Collect only vital data | Keep software updated |
Eliminate unwanted data | Maintain a centralized database |
End-to-end encryption | Integrate incident response plans |
Train your employees | Regularly review and update data policy |
Limit & monitor access to customer data | Conduct regular audit |
1. Understand data compliance
The first step in protecting customer data is to have a clear understanding of the data privacy laws and industry-specific regulations relevant to your business. While each region and industry has its own set of rules, like GDPR for EU residents or CCPA for Californians. Staying informed and regularly reviewing these regulations helps to ensure your business remains compliant and trustworthy.
2. Collect only vital data
With security breaches becoming a regular threat to businesses, collecting only important data based on your customer needs can minimize the risks. Let’s say your customers want to upgrade from a freemium plan to a paid subscription. It is better to ask for necessary information and leave sensitive data like credit card details to the third-party payment processor, as they are top-notch in that privacy protection.
Moreover, being transparent in your customer data protection policy builds trust with your customers.
3. Eliminate unwanted data
Like backing up customer privacy data, removing or overwriting unwanted customer information is equally important for businesses to reduce risk. For example, if certain customer details, such as personal information (Social insurance number, driver’s license) or health information, are no longer needed, securely deleting them is always advisable.
Since this process requires ongoing attention, incorporating CRM database management into your business would be wise. This helps create a continuous loop of backing up, reviewing, and cleaning data, streamlining the process and strengthening your approach to protecting sensitive customer information.
4. End-to-end encryption
Encryption is an encoding technique that protects sensitive information by making it unreadable to unauthorized users. Only those with the key are allowed to access the data. According to Forbes, businesses failing to implement adequate data encryption practices see an increase in data breaches by 72% in 2023 compared to 2021, affecting over 343 million victims globally.
However, implementing encryption in your businesses can effectively protect customer data and create a strong line of defense against cyber attacks. Moreover, adding it to your transparent privacy policy not only strengthens your security framework but also builds customer trust.
5. Regulate access to customer data
Limiting access to customer data is one of the data privacy best practices businesses should follow to minimize risks. Not every employee needs access to all types of customer information—for instance, a customer support agent doesn’t require marketing data, and vice versa. Assigning access based on roles reduces exposure and potential misuse.
However, it is equally important to monitor who accesses customer data and when. A centralized platform with access logs can provide transparency, detect unusual activity, and prevent breaches. Combining limited access with consistent monitoring strengthens data security and ensures accountability.
6. Train your employees
Human errors, such as misplacing passwords or replying to phishing emails, are often behind data breaches. Adding customer service training as a process to your employee education ensures they handle sensitive data responsibly, spot risks, and understand the differences between anonymization and pseudonymization. Moreover, ongoing, consistent training not only equips employees to protect data but also confidently adheres to established protocols.
7. Evaluate your third-party vendors
Constantly vetting the third-party tool or a customer data platform (CDP) with access to your customer data is one crucial step in protecting customer privacy. Let’s say you are using a SaaS tool for your business that has access to your sensitive customer information. If the tool isn’t secure, then your data is vulnerable to cyber-attacks.
Therefore, if you add any tech stack to your business, ensure it has relevant data protection and can handle sensitive data.
8. Keep your software updated
With cybercriminals constantly searching for companies that are not up-to-date with the software, stop being one of those targets. Software updates usually include bug fixes, security updates, and other modifications or add-ons, making it harder for hackers to crack. Staying current with updates is one of the crucial steps in protecting your business from potential threats.
9. Maintain a centralized database
Data silos happen when information is stored on disconnected systems, making it harder to manage and secure for the teams. For example, imagine customer subscription details are saved in one system while upgrade information is stored in another. This approach can lead to inefficiencies, unsecured storage, and even losing track of where specific data resides.
However, bringing all this information into a centralized CRM database can eliminate silos and lay a foundation for customer management strategy. Give your team secure, shared access to data, streamline workflows, and improve security.
10. Create and integrate incident response plans
With cybersecurity becoming a fact of business now, creating and implementing an incident response plan makes good business sense.
Let’s say your company suffers a breach and doesn’t have a proper response plan. Your team is likely to make expensive mistakes to resolve this. However, this can be terminated by having a proper incident response plan. It is not only a testament to your company’s commitment to protecting customer data but also adheres to regulatory standards.
11. Conduct regular audits
When your company’s database is the mainstay of your operations, holding all the sensitive information requires careful handling. The data must be checked regularly to ensure it is used responsibly. By doing so, you can maintain customer trust and protect against data breaches, cyber threats, and misuse.
12. Regularly review and update data policy
An updated customer data protection policy can benefit your business in two ways: building customer trust and protecting data from cyberattacks. Keeping this as a standard process and regularly reviewing those policies can ensure you keep up with changing regulations and industry standards. By helping, you can spot new risks, put better safeguards in place, and show your customers that you’re serious about protecting their data.
With knowing the customer data protection tips, you must also understand the cons of not doing it right.
Pitfalls of poor consumer data protection
Poor consumer data protection is risky and can damage everything from operations to reputation, with legal and financial fallout. Businesses must learn to balance privacy and personalization to offer a better customer experience. Below are the notable risks to keeping your data private from the breach.
- Personal data loss: If an individual’s identity is lost, cybercriminals can use that information to commit identity theft and phishing scams, which can cause severe damage.
- Legal issues: If the business fails to comply with the customer data protection policy and privacy regulations, it will face severe legal reverberation and customer data compliance violations bounding to that country’s lawsuits.
- Financial loss: If your customers experience the creation of false accounts and illegal money transactions, businesses can be liable for those losses.
- Business interruption: When a business faces a cyberattack, its operations can collapse or halt. They can create online traffic jams and make the site unavailable or sluggish to customers.
- Reputational damage: Business reputation is an essential factor in building customer trust. If it is affected by non-compliance with data protection, it leads to reputational damage.
Make your customer data protection a priority
While personalized customer experience is the key to business success, it’s equally important to ensure that customer data remains secure from cyber threats. When adding a new tool to your business, make sure it complies with global data protection policies like SOC2 type 2 and supports centralized data management with limited access.
SOC 2 Type II certification assesses how a company handles sensitive customer data based on specific criteria set by the American Institute of Certified Public Accountants (AICPA). Businesses with this certification ensure that they meet stringent standards for security, availability, processing integrity, confidentiality, and privacy.
DevRev offers a SOC2 type 2 complaints platform that meets the highest standards for security, availability, and confidentiality. It has features like end-to-end encryption, centralized data management, and role-based access controls to safeguard sensitive customer information.
Ready to keep your customer data protection a priority? Book a demo now.
