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Why trust and transparency are key to understanding consumer behaviour

Rachel Aldighieri, MD of the Direct Marketing Association (DMA), explains why organisations should use GDPR as an opportunity to improve the consumer experience.

Data privacy is at the heart of discussions surrounding business-consumer relations, following recent news headlines about data breaches and the upcoming GDPR. The Facebook and Cambridge Analytica scandal has put a spotlight on accountability and how some organisations must do more to protect their consumers’ privacy. It has sent shockwaves around the world at a time when many are already reexamining their data protection policies in order to comply with GDPR.

A recent report undertaken by the DMA and database marketing provider Acxiom, titled ‘Data privacy: What the consumer really thinks’, looks at consumer attitudes to sharing their personal information, while making important comparisons to previous research conducted back in 2012. It provides fresh insight into how willing consumers are to share their data and what will make them more likely to do so in the future.

Consumers are happy to share their data – under the right conditions

We are in a new era of data privacy. Consumers are now calling for something that has been a guiding principle of the DMA’s Code in the UK for many years, which is to ‘Put the customer first’. Questions have been raised about whether major data breaches and increased discussion surrounding our personal data is impacting consumer anxiety over how their information is used and managed. In fact, the DMA’s latest research shows that consumer attitudes are changing in a positive way.

The research found that almost two-thirds (61%) of consumers are happy with the amount of personal information they share. By far the most important factor for consumers in deciding to share their personal data is whether they trust the organisation. In fact, 54% of respondents ranked this option in their top three considerations for data exchange. Trust in an organisation remains the dominant prerequisite when engaging consumers within the data economy. Transparency also remains a key additional precondition for consumers to engage in information exchange with organisations – 88% of respondents claim that transparency about how their data is collected and used is important when sharing their information with a company.

Interestingly, the report also found that there is an important change happening to people’s attitudes to the importance of data sharing. The research found that more than half (51%) of consumers saw data as essential to the smooth running of the modern digital economy, up sharply from 38% in 2012. This highlights continued growth in the awareness and understanding of the UK public towards the role and value of data exchange in modern societies.

UK consumers demonstrate growing interest in a range of incentives for data sharing, particularly personalisation, recommendations and access to exclusive events/content. For example, the number of people who claim they would be more likely to exchange their personal information in return for personalised products or services has risen from 26% in 2015 to 34% in 2017. In addition, the number of people who would be more likely to exchange data in return for personalised brand recommendations has increased from 20% in 2015 to 31% in 2017. For a more valuable, positive customer experience, consumers clearly understand that they must trade access to their personal data for relevant opportunities in return.

A generational shift in attitudes towards data-exchange is underway. Younger consumers are more likely to adopt a pragmatic or unconcerned attitude towards data sharing and their concerns have decreased since 2012. Over 65s continue to show less confidence in sharing personal information in comparison to 18-24s and their high level of concern over data sharing has remained stable since 2012. Such evidence suggests that a more nuanced and tailored approach to engaging different generational groups within the UK data economy will be increasingly important.

Be transparent and accountable – use GDPR to build trust and improve the consumer experience

These findings are good news for businesses, but these trends will only continue if companies’ data privacy strategies are based on transparency and respect. GDPR highlights how important it is for businesses to respect consumer privacy and target them with content they have actively consented to receiving – at the same time making sure that those who have opted out of marketing activity are not contacted against their will. If you are collecting personal information you should only ask for what you actually need, be able to demonstrate why you need it, and only hold onto it for as long as it is needed – then securely remove it from your database. This touches upon another core principle of GDPR, ‘accountability’. This requires companies to consider the impact on privacy and the risks posed to their customers before doing anything with their data. Ultimately, date sharing and privacy comes down to three principles – obtain it consensually, use it responsibly and manage it carefully.

GDPR compliance is an opportunity to deliver a better customer experience. It is pivotal that organisations strive to achieve a balance between privacy and innovation. The ‘Data privacy: What the consumer really thinks’ research supports this – consumers want businesses to provide them with a unique experience. Most understand that data sharing is essential for the growth of the rapidly-evolving digital economy and they also show a growing interest in the benefits of data sharing, such as personalisation.

There is no need for marketers to fear GDPR. Use these new rules as a catalyst to become more customer-centric as an organisation, rather than thinking of it as merely a legal requirement. Personal data is a precious resource and it must be treated in such a way that encourages consumers to share it. Organisations must now capitalise on the opportunity to build consumer trust by being transparent and respecting their customers’ personal information, in an age where data is key to understanding consumer behaviour.

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