Your lack of consumer data privacy experience is costing you revenue
Trust is the foundation of the consumer experience. From the moment someone comes to your website, app, or establishment, the trust calculations begin. Trust has a direct relationship to revenue.
Increasing your company’s revenue starts with building trust with your clients and ensuring they have a great customer experience. The level of trust in business relationships is one of the greatest determinants of success, so start building it now. Provide your customers with quick and predictable service, be transparent and engage throughout the process as much as you can. Your customers should be happy to return to you rather than search for another company, and you are likely to get some referrals along the way as well. — Peter Ord, Forbes, 2021
Most customers do not trust you with their personal data. According to McKinsey & Company, trust in consumer companies has never been lower. Even the most trusted industries of healthcare and financial services have sub-50% trust scores and every other industry falls off sharply from that low mark. The average tech or retail company has under 20% trustworthiness scores.
These polls and stats are everywhere and the numbers are only getting worse for companies. According to a 2021 survey by KPMG, 86% of consumers say data privacy is a growing concern. 40% don’t trust companies to ethically use their data, and 30% are not willing to share their personal data for any reason. According to Google, 80% of consumers are concerned about the potential misuse of their personal information and about 80% believe companies should be more upfront about the data they collect.
The consequence is real and costs companies revenue. When Apple introduced App Tracking Transparency, or the ability to turn off app tacking on phones, a shocking 96% of Americans (and 75% of users worldwide) used to opt out of tracking. The consequences were swift. Large companies lost $10B in revenue. Small and medium businesses found they need to spend more on advertising to find their target audience.
A few quarters later, the impact Apple’s anti-tracking features have had on social platforms can be properly measured. Apparently, social media apps lost nearly $10 billion as a direct result of Apple’s move. BGR.com
Okay, how do you build trust with data privacy?
First, what is trust? There is a pretty famous equation for measuring trustworthiness and if you really think about it, it makes absolute sense. Trustworthiness = (Credibility + Reliability + Intimacy) / Self-orientation.
Let’s break it down in using data privacy and personal data. (From TrustedAdvisor.com)
Credibility: Does your company have credibility when it comes to data protection, data privacy, and data security? Like we discussed above, the answer is likely no. You may not be not trusted with customer’s data and will need outsource that to a company that is. Find a company that focuses on data privacy and utilize its expertise to build credibility. At Rownd, we have found that when our partner simply states they are using a third party for data privacy and protection, credibility goes up.
Intimacy: This refers to the safety or security that we feel when we entrust something to someone. Transparency is so important here. Let customers know exactly where their data is going, why it is collected, how it will be stored. We accomplish this for our customers through small notes above and around where personal data is being collected and progressive disclosure if they want to learn more.
Self-orientation: “sits alone in the denominator, the most important variable in the trust equation”. The lower the self-orientation of the company, the better. Customers trust employees and companies that are free to honestly focus on them and their needs. It is when a conversation does not feel like a sales pitch and instead feels like a curious conversation, that customers let down their guard. Giving end-users absolute control over their data after you collect it is key. Letting customers know they can control their data, with ease, from day one, creates low self-orientation when you are trying to collect data. This alone drives trustworthiness up faster than anything else.
When collecting, storing, and managing personal data, you have to offload personal data storage and management to gain credibility and reliability, you have to be very upfront and transparent to gain intimacy, and you have to give consumers absolute control over their data from the moment they are asked for it go make inroads in self-orientation.
Research by Google confirms this.
Transparency is crucial to build trust. People prefer to buy from companies that are clear, open, and honest about the personal data they collect and why. Eight in 10 adults believe companies should provide more detail upfront about what data they collect from visitors to their websites…
People are three times more likely to react positively to advertising when they feel a greater sense of control over how their data is used.
Research from S&P Global also confirms the trust equation. The fastest way to build loyalty is to give consumers control over their data, the ability to manage and delete their data and transparency over what data is being collected.
Put another way, credibility (ability to deny access), intimacy (ability to see what data is being held), and the all-important self-orientation (control over data) pop up in nearly every poll and survey.
We have also seen this with different parts of the user experience. Companies like Auth0 helped countless apps and websites build trustworthiness by allowing the login experience to be outsourced. We naturally trust a company more if we know our login credentials are being safely stored. The same with checkout. In Web 1.0, the checkout process felt dangerous and ad hoc. Then Stripe, Square, and countless others have helped create a high trust experience. By offloading checkout, companies instantly built trust. Personal data collection and data privacy are the exact same.
Why organizations are not jumping into the data privacy pool if the water is so warm?
According to Deloitte, one of the biggest reasons for not implementing data privacy strategies and experiences is a lack of privacy tools.
This may be a symptom of the larger issue: inadequate technology tools for privacy management. Even mature privacy programs often rely on time-intensive, manual, expensive labor to respond to consumer requests and document how the business is using data. Automating this process requires organizations to wade through myriad IT options to identify and build an architecture that suits their needs. — Deliotte
Make a bold move and start creating trust today by doing something that may have seemed radical five years ago but is now pretty mainstream — be absolutely transparent about why you are collecting personal data and give your customers absolute control over their data. Protect the revenue you have and grow more by doing the right thing with your customer’s data. Don’t want to build it yourself? Check out Rownd! We firmly believe that personal data belongs to the end-user and we can help you show your customers you care about their information.