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Aim for long-term customer identity relationship

Consumer identity management can deliver competitive advantage, but only if businesses follow some golden rules, says KuppingerCole

Customer identity and access management (CIAM) is “customer relationship management on steroids”, but the long-term goal should be building and retaining trust, according to Matthias Reinwarth, lead advisor and senior analyst at KuppingerCole.

“It is important to value customers and not to annoy because trust takes years to build, but can be broken in seconds and takes forever to repair,” he told the opening session of Consumer Identity World Europe in Amsterdam.

Businesses need to look beyond the technicalities of registration, authentication, authorisation, said Reinwarth.

“Consumer identity management is far more than a security domain,” he said. “Service providers should think about CIAM rather as an access enabler, welcoming customers, getting them to like and use services and enabling a journey across online and offline channels and services.”

Businesses should be wary of trying to know everything about their customers from the very start, said Reinwarth, adding that while customer experience is a competitive differentiator, it can have a negative effect it is done poorly by asking for too much information and without meeting customer needs.

“We should aim at building and maintaining long-term bonds with customers based on trust, and we should be thinking about fostering trust when it comes to CIAM,” he said. “Key to that is getting the balance right between the technical and business requirements and the customer experience.”

According to Reinwarth, service providers essentially need to ensure that they make it clear what customer information they are collecting, what they are going to do with it, what the customer is going to get in return and how the customer can withdraw at any time.

While there is no “golden path” to follow for every organisation, he said there are six golden rules that they should follow to ensure they get the balance right.

“First, organisations should always ensure that they value customers, that they are never creepy in the information they collect and use, and they build everything they do on consent or explicit contracts with their customers,” said Reinwarth.

“Above all, build on and convey trust, which you can do only if you deliver on shared values – do not sacrifice long-term relationships for immediate business value,” he said.

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