Have you ever come across something that made you think a particular company was reading your mind? Perhaps, it was an ad for a shirt you almost bought, or you got a call regarding a product you just read about online. These advanced forms of data-driven customer engagement are fascinating as companies are increasingly leveraging them to serve customers in their moments of need. However, there’s a thin line between providing a ‘personalised’ service and being ‘creepy’, and companies are struggling to draw that line, impacting consumer trust in brands.
According to a recent Cognizant survey of 2,404 consumers across Asia-Pacific, 91% of respondents were ‘concerned’ or ‘very concerned’ about the privacy of their data online. Furthermore, 58% felt they have little control over the use of their personal data collected by companies and 53% don’t believe the claims made by companies about protecting their private data. We are living in a time in which technological advances are outpacing the rate of legal and cultural constructs, causing significant consumer confusion, even fear, when it comes to trust.
This presents a challenging dilemma for businesses. On the one hand, consumers are demanding more personalised experiences, while on the other hand, they don’t trust those businesses with their data needed to deliver personalisation.
To overcome this challenge and win over customers with data privacy fears, there are four key factors survey respondents identified as important or extremely important for determining their level of trust in a company:
- Open and transparent communication (67%)
- Quality products (61%)
- Fair pricing (60%)
- Keep consumers informed about data-use policies (59%)
In essence, customers are looking for a transparent relationship with the brands with which they’re sharing data. As with any other relationship, this is key to building trust.
Companies may believe it’s enough to develop and publish data privacy policies, but 57% of consumers surveyed feel that understanding such policies is almost impossible. Open communication to provide a clear view of how a customer’s data is being used and shared is no longer a ‘nice to have’ feature, but has become a new competitive differentiator for businesses. In fact, the study shows that almost 50% of consumers surveyed are willing to share their personal information, if a company asks upfront and clearly states its use.
In an age where ‘try before you buy’, refunds, and exchanges are no longer a request, but an expectation, it should come as no surprise that quality products and fair pricing can significantly influence how much a consumer trusts your brand. Businesses have always had to consider quality and pricing as part of their go-to-market strategy, but now more than ever before, a failure to deliver on the parameter of “trust” can prove catastrophic to a business’s public image and long-term success.
In today’s “always on” world, one hasty remark on even a minor product flaw can go viral in the blink of an eye and can land an organisation in trouble. It’s important for companies to walk the talk to build trust with consumers.
With the growth of the Internet of Things (IoT), artificial intelligence (AI), virtual reality (VR), and data-centric marketing technologies, the issue of data privacy is only going to become more severe. As the virtual economy continues its rapid expansion in the coming years, we will certainly hear of more issues involving security, privacy and ultimately trust. There will be distinct winners and losers ― at personal, corporate, industry, and societal levels ― as trust issues accelerate.
Companies that make transparency and open communication their biggest assets will enhance their brand value. But companies that mislead consumers in any way about how their personal data is used will not be forgiven and are increasingly at risk of putting themselves on the path to self-extinction.
Manish Bahl is senior director at Cognizant’s Centre for the Future of Work