Today’s data collection and user privacy landscape is a minefield. But it also provides important business advantages for brands and companies to address privacy concerns head-on and establish a foundation of trust with their loyal customer base.
Understanding how customers perceive your company’s data practices in this complicated landscape will help you develop the transparent strategies to build the trust you need moving forward.
A new paradigm for privacy in today’s world
Gone are the days of total privacy when it comes to personal data. Every time you walk out the door, you encounter situations where you’re willingly giving personal information away — when you buy a coffee on the way to work, as you pump gas, or listen to the new song you downloaded onto your Spotify playlist.
These seemingly innocuous actions all pile up together and morph into a personalized, digital persona that helps inform how brands and companies speak and interact with each and every consumer. The majority of people may hate this, but let’s be clear: Everyone signed up for it. Time and time again.
How often have you nonchalantly scrolled through a Terms of Service page only to click “accept” without reading anything at all? How many times have you searched for something on Google, whether to find the nearest grocery store or to look up the cheapest flights for an upcoming vacation? As a consumer society, we’ve granted companies the power to take first-party data, and zero-party data, and all kinds of information whenever they so choose, just by living our day-to-day lives.
The privacy paradox
By now, you’d assume people would be comfortable with giving up their personal data in exchange for the assurance of daily conveniences. However, a recent report shows that only 40% of users trust brands to use their personal data responsibly.
This juxtaposition — when consumers continue to give their personal data away but still don’t trust brands to act responsibly with that information — is called the “privacy paradox.” It sums up most touchpoints we have when interacting with brands and companies.
First used as a term in 2001, the privacy paradox is a dichotomy in how a person intends to protect their online privacy versus how they actually behave online, ultimately not protecting their information. This is usually because of an unwillingness to break convenient habits or behaviors. For instance, taking the required time to read the Terms of Service before downloading an app or signing up for a user platform.
While data privacy has always been a top consumer concern, in recent years it’s become an increasingly high priority with major tech companies like Apple, Google, and others receiving intense pressure to heighten security regulations for personal data use. This has led to recent privacy updates that allow users to opt out of tracking and limit the amount of information brands and companies can now obtain.
According to a McKinsey survey, one in 10 internet users worldwide (and three in 10 U.S. users) deploys ad-blocking software to prevent companies from tracking online activity. 87% of consumers say they would not do business with a company if they had concerns about its security practices, and 71% said they would stop doing business with a company if it gave away sensitive data without permission.
Consumers are increasingly buying products and services only from brands and companies they trust and believe are both protecting their personal data while also using it to connect with them through hyper personalized and engaging touchpoints.
Read next: Build trust, gain sales
Lead with first-party data transparency
First-party data is perhaps the most simple and ultimately effective personal data to collect from users. This data is information companies collect from consumers through owned digital channels. Examples of first-party data include survey data, purchase history, website activity, email engagement, sales interactions, support calls, customer feedback programs, interests, and general behavior in owned digital channels.
What makes first-party data such an opportune marketing tool is that consumers have willingly given brands this personal data. This makes it reliable and future-proof as long as people have consented for their data to be used by marketers to make contact and engage.
With this information captured, it’s imperative for brands and companies to ensure points of contact with users are effective, personalized, and clearly define how and when their data will be used for their personal benefit. Effective methods include an email or text communication that clearly state a person’s information will be kept private and not sold to a third-party; or that a user can easily choose to opt out of communications with a simple click or two.
Consumers respect brands and companies that emphasize an individual’s right to opt out of sharing data, so offering an easy-to-use consumer data opt-out feature, and being very clear about your intended use of their data, is key to establishing a baseline foundation of trust for future engagement.
Give power back to the consumer
According to the Cisco 2021 Consumer Privacy Survey (2,600 anonymous responses across 12 countries), nearly half of respondents feel they are unable to protect their personal data. They cited that the main reason is that companies aren’t being clear about how they are using peoples’ personal data. As a result, one-third have become “Privacy Actives” and stopped interacting or doing business with traditional companies like retail stores, banks and credit card companies. In addition, 25% have made inquiries to organizations about their data and 17% have requested changes or deletions to this data.
The customer should always come before the data — no exceptions. Smart brands and companies will view privacy and respect for customer data as a potential differentiator rather than a barrier to entry. In addition to the tactics described above to help brands and companies be more candid and open with users, there are also important tactics that are easily implemented to continue building trust and to empower consumers to have a say in the conversation about their own data privacy.
First, every company should proactively send out quarterly or annual user data privacy reports that specifically outline how customer data is being used, as well as the safeguards being implemented to protect that data from potential data leaks or hacks. The company should also provide additional levels of assurance of how information is being used to line up with ever-evolving customer comfort levels.
Additionally, the way in which you provide this type of informative, personalized information is key to whether a consumer will choose to react positively or negatively. A post from Statista shows that 97% of people between 18 and 34 accept conditions without reading them. Additionally, the time needed to read through terms of service agreements for today’s leading online services and platforms can be more than an hour. While consumers should be reading the fine print, it’s clear the majority fail to do so — but still expect brands and companies to offer up ultimate transparency when it comes to their personal data use.
How to communicate privacy information
A solution to help bridge this gap and continue to build trust, instead of lengthy emails and updates, is to deliver this information in more visual forms like an infographic, chart, or video message. Personalized touchpoints with consented consumers could include:
- Personalized emails addressing a customer’s specific needs.
- Rewards or promos designed specifically for each user based on their personal behaviors.
These are just some of the strategies every company — big or small — should be considering to maintain long-term consumer trust and mutual openness.
The data privacy conversation is sticky and comes with many opportunities for brands and companies to mess up and lose consumer trust. With so many opportunities for failure, it’s imperative for brands and companies to be strategically thinking about the most effective ways they can use consumer first-party data to immediately establish trust, consistently work to maintain consumer relationships, and provide the level of user data and privacy transparency that is ultimately expected in today’s evolving digital age.
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Opinions expressed in this article are those of the guest author and not necessarily MarTech. Staff authors are listed here.