Be Data Smart – and Reap the Rewards in Loyalty
Today’s consumers are used to handing over their data without much idea of where it’s going or why, and poor internal company data practices have led to numerous data breaches, abuse and declining consumer trust. BUT - a new survey reveals REAL benefits of being upfront with your consumers about how you’re using their information.
When did you last tap ‘OK’ to share your personal information – or even your location – with an app? In the last few years it has become second nature to tell our smartphones and other digital devices everything about who we are and where we are. This information underpins everything from social media to dating apps, e-commerce and ride hailing, and we usually give it away without even thinking…
Unfortunately, when the way businesses handle this personal data hits the headlines, it’s rarely good news. If it’s not Facebook profiles being leaked for political advertising, it’s consumers’ credit card details and passwords being hacked.
Even when data is handled responsibly, it can be hard for consumers to get a clear idea of what’s really happening. Where does their data go? Who gets to see it and use it? Without answers to these questions, it’s natural for consumers to be concerned. Indeed, this very subject is the focus of a must-read book called: The Age of Surveillance Capitalism, by Shoshana Zuboff, which essentially states that tech companies want to control every aspect of what we do, for profit!!
However, FEAR NOT! A new study conducted by global insights association ESOMAR and the company Here Technologies, in association with research partners BuzzBack Research and Cint, took a detailed look at how consumers feel about the way their data is used, and what it means for businesses.
We found that three quarters of UK consumers share their location data at least sometimes. But that doesn’t mean they’re happy about it. More than a third said they only do it when they have to, and many were in doubt about whether it was really necessary. Only one in five were confident that they knew what happens with data after they share it.
One thing they were much clearer about was the risk of having their data misused; 6 in 10 (!!) people had experienced this, whether in the form of spam, phishing, having a password hacked or falling victim to credit card fraud.
Most worryingly of all, the majority said they didn’t like the privacy practices of most data collectors. Sharing data is something consumers are reluctantly resigned to – they put up with it in order to use digital services.
And if you think the younger generation are more relaxed about data sharing, think again. While 25-34-year-olds are certainly more relaxed than older age groups, the 16-24 bracket are showing greater concern than those who came before them, perhaps as a result of having grown up with more education and awareness about online threats. The problem isn’t going away.
The overall picture is of consumers feeling jaded and let down – a finding that should set alarm bells ringing for brands. All that data sure is useful, but is it coming at a hidden cost in terms of trust, loyalty and long-term brand strength? Is this a problem like climate change, which everyone feels someone else will sort out, while the planet around us degrades? The concept of Nero, Rome and burning comes to mind!
Thankfully, it’s not all bad news. There’s a big opportunity for companies to be more transparent in the way they handle data and a huge associated benefit! Our survey findings suggest that if you’re upfront and honest with consumers, they’re not just more likely to share data with you, they’re also more likely to buy your products and use your services. In other words, transparency pays!
How can companies get it right? The way we see it, there are three key lessons.
- Open up
One thing consumers are very clear about is that brands must say when they are using their data. Ninety-one per cent of UK respondents in our survey agreed on this. People want to know what data you’re using and what you’re doing with it, but also why it’s necessary for them to share their data with you in the first place. Don’t just say that you need blanket access and expect them to trust you. If you leave questions unanswered, people will be justifiably anxious. And don’t get technical, explain it to them in layman’s terms. Nearly three quarters of UK consumers say they are likely to share their data if the data collector is clear about why it is needed and how it will be used.
- Earn trust
More than a third of people in our survey (36%) agreed strongly that they were more willing to buy or use services from companies that handle personal data as they should. If your business relies on consumers handing over their personal data, then it’s on you to demonstrate to them that you deserve that trust. That means showing that you take a responsible and ethical approach. But remember that even ethical companies are not immune to data breaches, so also show that you are serious and competent when it comes to digital security. Being a member of an organisation like ESOMAR is a HUGE step in the right direction on both these points.
- Communicate the benefits
Telling consumers that you’re using their data – and explaining how – is a great first step. But what’s in it for them? If the answer is “not much”, then it’s going to be challenging to get their data and earn their ongoing trust. Be clear with consumers about what they will get in return for their information; if you’re not upfront with them, they may walk away.
For too long, people have felt let down by brands when it comes to transparency around data practices. Consumers are now telling us loud and clear that if businesses can step up and exceed their expectations, there are significant rewards to be reaped.