Only trust can overcome data privacy fears

Consumers are more likely to offer their personal details to a brand that is seen to be transparent, rather than in return for a cash reward, according to fast.MAP/DMA research

Privacy remains a burning issue for marketers. Only last month, Facebook introduced new privacy settings for its global network after consumers complained about their complexity.

But research from the fast.MAP/DMA May 2010 Data Tracker, sponsored by Equifax, shows that consumers are more willing than previously thought to hand over personal details if marketers have built a relationship with them first.

Three-quarters of consumers are happy to share their personal information for marketing purposes with companies that they have a relationship with, according to the figures. They also believe the brands they know well will treat their personal data with respect; when buying online, 84% are confident that brands they trust will treat their personal details responsibly.

Chris Combemale, executive director of the DMA, explains: “The foundation of people’s willingness to share data is trust and a good value exchange. What I mean by value exchange is that people feel that what they get back from the company is worth them giving up their details. If someone has a positive experience with a business, it is likely to build on this.”

This is in stark contrast to the finding that 89% of people will not share their details with companies with which they do not have any relationship unless this is strictly necessary.

“Brands must be open and transparent when they are seeking new customers. Make sure you have a clear privacy policy,” warns Combemale.

For marketers keen to reach new buyers, the research suggests that the best course of action might be to team up with a brand those people already know and trust. While 72% of people are not willing to share information with companies connected to the brands they know, this is a 17 percentage point improvement from an entirely cold approach.

Beyond knowing and trusting the company, other factors that encourage consumers to share their personal details online include businesses having websites with obvious security features (chosen by 81%). Seventy-eight per cent also feel confident about companies that ask who they can share data with or say they will not share any details; 77% like brands that give consumers the option of how they will communicate with them.

Seventy-three per cent are made more confident by the longevity of a firm, while 75% like an easy-to-find data protection policy and 72% feel reassured by finding contact details. More traditional corporate elements, such as an online retailer having a high street presence, seems less important, with just 60% choosing this as a confidence booster.

There does not seem to be any shortcut method for persuading consumers to give their details to companies. Some common marketing ploys, such as offering store cards or competitions fall fairly flat. Just 16% of people would be prompted to give their personal details to an organisation if a store card was on offer, while 27% would respond to a competition.

Even shopper loyalty points seem to have little influence on willingness to provide data. Just 24% agree this would make them hand over data, rising to 28% for money-off vouchers. Combemarle says he is a little surprised that loyalty schemes have such a limited effect on consumers’ willingness to share their details.

Even more surprising in such economically tough times is the fact that just 28% claim a discount would prompt them to hand over their personal information. However, 54% would be prompted to hand over their information because they trust the company involved, and 42% say businesses providing essential services also earn the right to receive their data.

A clear privacy policy also seems very important to consumers. Thirty-nine per cent say this is what would make them hand over their information, 11 percentage points more than a discount. Marketers seeking to persuade more consumers to offer them personal details might do well to consider that transparency seems to be a greater motivator than cash.

“Companies have the opportunity to go further than just a clear privacy policy,” says Combemarle. “They can also write any privacy statements in plain English. It’s amazing how complicated some brands make everything sound.”

The research also shows what makes customers unsubscribe from marketing communications. More than six out of ten will ask to stop receiving communications if they never gave permission to be contacted in the first place and find what they are sent irrelevant. More than five out of ten will unsubscribe because a communication was poorly targeted, the brand was over-communicating with them or they had a bad customer service experience. Indeed, 49% of people say they have had a bad experience that caused them to stop trusting that their data will be used responsibly.

Personal experiences seem to be far more important to consumers than what they see reported in the media about data issues. Just three out of ten people say they have stopped trusting brands that have had bad press due to lost or misused customer data or breached regulations. “There can no longer be a one-size-fits-all approach,” says Combemarle.

For companies hoping their consumers will reveal more personal information if they adapt how they contact people, it is interesting to see how differently consumers react depending on the channel used to contact them.

The social media channel makes people feel most wary about providing information. While Facebook campaigns and Twitter debates may be very popular, only 48% of people are willing to divulge their name, with just 18% willing to share their address in this format.

“Social media networks need to put much greater emphasis on security and privacy,” says Combemale. “They are not exempt from how every other organisation has to behave. As they realise this, consumer confidence will improve. The changes last month by Facebook show the networks have started to understand this.”

Mobile also seems unpopular as a channel for contacting people. SMS receives the strongest negative response among all media options. More than two-thirds (68%) disagree that they would opt-in to receive this, with 44% disagreeing strongly.

Despite such interest in what is being done with their data – 88% of people are concerned to some degree about the security of their information – just 22% of consumers claim to have done anything about their concerns.

At first glance, this may appear foolish as one in ten people have experienced more than one potential security breach in the last six months. However, 77% of people have not experienced any actual breach. Those data breaches that have generated a great deal of headlines, such as people using false aliases on social networking sites, affect just 1% of people.

Most people actually regard others to be responsible for handling their information. More than a third believe companies are responsible for looking after their data; 15% think it is up to the government; 9% think it’s in the hands of the information commissioner; and 3% think it’s up to trade bodies.

“Handling data is up to everyone,” says Combemarle. “Companies must take that seriously; it can’t be up to the government. If people are to feel more in control of their data, they must be given the tools to manage this. That’s the challenge.”

It appears marketers must be seen to be responsible for consumer data while also gathering information only when customers

see it as strictly necessary. Those businesses most likely to have success in getting the tone right are those that already have relationships set up with consumers. It’s time to get close to your customers.

The frontline

We ask marketers on the frontline whether our ‘trends’ research matches their experience on the ground

Sue Leeson, marketing director, QVC

I’d agree with the research on how people feel about data. We don’t share any of our customer data with any other business or sell it on. The only reason we’d ever provide it to a vendor of ours is so they can fulfil an order – and even then, it’s wrapped up in a massive contractual agreement.

This has been our policy since QVC was set up 23 years ago in the US and when I joined nine years ago as marketing director in the UK, this was made very clear to me. I was told: “We don’t share our data or let vendors market to our audience.”

This data policy is part of our company model because our entire business is built on repeat custom. Our monthly tracker through research company GfK shows that 93% of people regard QVC as a brand they can trust, and 97% shop with us again. So we won’t exploit data and risk that relationship.

Of course, we do market to our own customers using their data but we are very careful to send them only added value communications. For example, we have to send a welcome pack in the post because we are obliged to provide everyone with our terms and conditions – not everyone can check these online. People can also subscribe to emails, but these are about notifying people when brands they have repeatedly bought are coming up on our TV channel.

Because our customers don’t receive direct marketing from our partners, I don’t know whether everyone is clear that we never pass on their data. They don’t receive any spam so they probably don’t think about it. Our very loyal customers who know us inside out are probably aware of it; customers who use us more lightly are more likely just to assume that we will take care of their data.

It’s interesting that the research shows SMS is unpopular. It is particularly intrusive. We trialled it in terms of providing tune-in information because a certain skincare brand may only appear on the TV channel every two months so you might not want to miss that. We didn’t get negative feedback but when we asked people to opt-in, there was a fairly neutral reaction.

For us, our brand is all about building relationships and we don’t want our shoppers to have a negative experience. There is no merit for us to bombard people as we want a long-term relationship with customers. And you build that by not exploiting them or selling their data.

Steve Purdham, chief executive, We7

I think this research appears to reflect people’s real attitudes for a change. It follows our own qualitative findings that revealed people will trust a brand they have a relationship with, but the key word there is “trust”. 

There also has to be a perceived value alongside that trust to convince people to part with personal data. In reality, personal details are treated as a form of barter for some element of value from a company. The equation is simple – a more trusted brand can offer lower value and still receive the data. But an unknown brand can also get the data as long as the consumer sees the perceived value of any relationship as high.

I’m not surprised that people aren’t more willing to give their data to companies that work with organisations they trust. A partnership between connected companies may be real in the brands’ world, but not for the consumer. If personal data is provided against value, you may trust and value direct relationships, but online, that doesn’t extend to the next level. New value and trust propositions must be created for each company.

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