In Hollywood there is a saying – show, not tell. It means a film should develop its plots and characters by what they do, rather than what they say. Marketers would do well to learn from the maxim if new research is anything to go by. The more brands demonstrate through their actions that they recognise the consumer, the more confidence those individuals have around data protection concerns. Equally, it emerged that a significant proportion of consumers have yet to see this happening.
90% of people link satisfaction with data trust
Winning trust would seem to be relatively simple – 87% of the 2,000 consumers surveyed by Transactis agreed that, if they are receiving good service and relevant communications, they would assume the company is looking after their data carefully (see chart 1, right). This is true for most social groups, although pre-family consumers aged 25 to 34 are the most likely to say this.
“Consumers don’t tend to be too worried about data protection until something goes wrong,” says Richard Higginbotham, marketing director at Transactis. For the majority, the experience of exchanging data in return for products, services and marketing is a positive one. The problems emerge at the margins, when an individual experiences over-targeting, data loss or even fraud.
“Trust in companies to look after data has a parallel to trust in banks,” he says. If the customer experience is positive, so will the relationship. More than likely, the individual will give little thought to what is happening to their data.
Problems arise because marketers can mistake trust for licence. “With permission, in some cases, marketers almost see it as an excuse to o
to the consumer what they will. The privacy statement should be a statement of intent,” argues Higginbotham.
87% link good service with data security
This is where service that builds trust should begin. It can also be the basis for providing further incentives to capture additional information. Some 81% of consumers in the survey say that relevant discounts, special offers and loyalty bonuses based on information already held will encourage them to tell the company more (see chart 2).
This has been standard practice in direct marketing for a long time. Positive reactions to these incentives suggest that consumers understand and are relaxed with the value exchange involved. Highly visible returns, such as Tesco Clubcard and Nectar points, for example, have reinforced the deal involved. As loyalty programmes have demonstrated, rewarding customers builds satisfaction. What the survey indicates is that there is a further return on marketing investment from such schemes – the higher the level of customer satisfaction, the more likely it is that customers will trust their data is being well looked after. Well over 90% of consumers take this view, with the pre-retirement age group (55- to 64- year-olds) making a near universal link between satisfaction and data trust (see chart 3, page 42).
“As long as the customer feels valued and the service provider is careful, they have that trust,” says Higginbotham.
Equally, it is easy for organisations to start to erode satisfaction and begin to lose trust. This is most likely to happen where there is a disconnect between processes that leads to the customer having to provide data for a second time. Consumers were asked how they feel if asked to provide their details, having already given them previously. Over three-quarters (78%) said they would not believe the company is looking after their personal information properly (see chart 4, page 42). That is a striking impact on trust that most organisations are likely to encounter. As Higginbotham points out: “That crystallises in the online retail space where a customer logs on and is asked to verify their identity. Someone having to spend two minutes entering information again that they have given before feels like there is a problem.
Where did it go?” Without having in any way compromised data security or lost information, a brand can give the customer the feeling that it has, just by failing to connect back office databases to front office touchpoints. The rise of third-party identify tracking software is evidence of this growing fear among consumers.
Another way brands can get it wrong with their customers is by using personal information only in one aspect of the business. Marketing is
often the most data-hungry function and has been at the forefront of demonstrating what it knows through relevant and personalised communications.
But if the customer service is poor, however relevant the marketing might be, customers will not buy, according to 89% (see chart 5, above).
The only group with a slightly more tolerant view are young adults (18 to 24) where 82% won’t buy if they get poor service. That is scant comfort for any brand struggling to create a good customer experience.
Higginbotham notes that there is a paradox at the heart of these consumer opinions. On the one hand, they often express fears about the “Big Brother” aspects of extensive data being collected by commercial organisations. “The only motive behind that is profit,” he says. The same fears are also expressed towards public sector data gathering, such as the central NHS patient information database, even though the result is
better service for everybody.
21% of people said firms don’t use their details to good effect
That suggests the trade-off at the heart of the data-service value exchange has limits.
Commercial companies can offer better service, relevant marketing and even rewards, but the consumer knows these are ultimately in the interest of the brand, rather than themselves. So tolerance is constrained by commerce.
Less could be made of that if those brands were better at showing customers they are using data appropriately. Transactis has found this does not always seem to be the case: 21% of consumers said that none of the companies they buy from truly uses their data to make attractive offers and give good customer service (see chart 6, right).
“That is a significant minority – not just one blogger making a lot of noise,” says Higginbotham. In other research his company has carried out, half of consumers said they got product offers for things they had already bought or were marketed to like a prospect, when they were a customer.
Bad practice is often accidental. Bad reactions by consumers can also be fleeting. As data becomes more important to brands and more of
an issue for consumers, it is becoming less possible to rely on tolerance. Companies need to show their customers they are doing the right
things with their data, not just tell them.