A study of 25,000 consumers across 33 countries, the majority of 92 % of which are U.S. consumers say it’s extremely important that companies protect their personal information. Another 79 % say it’s frustrating to realize that some cannot be trusted to use it appropriately. Lack of trust is one of the biggest reasons consumers switch companies.
And with the General Data Protection Regulation (GDPR), a regulation intended to strengthen data protection for EU citizens and let individuals decide which brands can use their personal data, good data stewardship is becoming critical to the success of every business globally.
The Importance of Insight
The ability to process personal data is critical to business in the digital age. Data-driven organizations rely on customer insights to help inform the development and design of products and services, the overall customer experience, and marketing strategy. From demographics to personal preferences, customer data allows companies to deliver hyper-relevant products, services, and experiences.
Some companies have built entire business models around the sale of anonymized personal data. Technology is creating opportunities for businesses to understand their customers on a deeper level and monetize this knowledge. Biometric, visual, genomic, and device data can allow ever-increasing degrees of personalization.
Personal data is a currency no business can afford to risk.
Earning Digital Trust
To earn digital trust, organizations' leaders have to eliminate anything that jeopardizes it. Companies looking to future-proof their customer data supply should take these measures:
• Deliver on their commitments. 83 % of U.S. consumers say it’s extremely frustrating when companies promise one thing but deliver another. An organization’s commitment to delivering promised experiences and meeting customers’ expectations is paramount to earning trust. Successful companies understand their baseline level of trust and eliminate issues or offers that detract from the trust. Otherwise they must reset their parameters.
• Establish rigorous governance. The only way trust can become sustainable is by establishing a rigorous process and a robust, cross-functional governance structure to continuously measure trust and hyper-relevant effectiveness and acting on the findings. Please see our posts on Information governance.
• Give customers full control over their data. As customers demand greater control over how companies use their personal information, organizations must become more transparent. Customers must be given full access to, and control over their data, which will demonstrate responsible stewardship and ethics. Furthermore, they must ensure that the appropriate safeguards are in place to protect it.
Some companies may look to adjust their profit models and potentially charge for services (i.e., “pay for privacy”) so customers are explicitly aware of the value being exchanged. That way companies could make money on direct interactions with customers as opposed to the derivatives of those interactions (i.e., selling insights or advertising). Or they could move from an information exchange relationship to a more classic view of understanding what customers need and having them pay for it.
More companies will undoubtedly assess their existing propositions and the economic viability of new models. But the question remains as to whether the underlying information and experience will become something that is merely expected, rather than something that customers would be willing to pay for.
The Path Forward
Digital trust is only sustainable when companies establish a rigorous process and governance structure. Most importantly, digital trust must be managed as the critical growth enabler it is. Companies will inevitably look to capture new categories of customer data such as biometric, geolocation, even genomic data in their drive for greater relevance. Customers' concerns will inevitably rise, so it’s critical that companies have strong data security and privacy measures in place, give customers full control over their data, and, crucially, are transparent with how they use it.
We have successfully implemented data security and data privacy in many organizations. Please contact us today for a free consultation.
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