Responsible data practices: the key to customer loyalty

Russell Howe at Ketch argues that consumer trust can only be maintained if data privacy is protected

 

From concerns about social media security practices to calls for encryption across messaging apps, everybody is talking about data privacy.

 

Tech giants like Apple and Google are competing for customers with ever-more sophisticated mobile privacy offerings – from app tracking controls to options for locking down compromised devices. For the brands taking privacy seriously, there’s an opportunity to foster loyalty and build trust with consumers.

 

Consumer awareness in data protection and privacy is rising. Privacy-focused regulations across the globe, from GDPR to the California Consumer Privacy Act, have required businesses to overhaul their data privacy practices. And with events like the Cambridge Analytica scandal shedding light on how companies abuse consumer data, individuals have started taking note of their rights when it comes to data sharing and protection.

 

Business leaders understand critical, closely-tracked metrics like customer acquisition and retention. They’re dedicated to improving user experience and customer service and they’re constantly considering their market value, competition, and opportunities for growth.

 

But what if you were told that data privacy has become a crucial factor in your customers’ buying decisions? That’s what a new study has found.

 

The statistics

The Person Behind the Data study commissioned by Ketch and MAGNA found that UK consumers will reward brands with responsible data practices with 28% more buying intent.

 

Data transparency is also front and centre of consumers’ minds – 53% would trust a brand more if their data is handled correctly and transparently.

 

These results have huge ramifications for businesses. CEOs, as well as sales and marketing teams, must take note.

 

Brands acting responsibly

Understanding the importance of responsible data practices is one thing. It’s another to implement these practices in such a way that improves your brand reputation, gaining customers in the process.

 

Consumers are telling us that they want their data to be used responsibly. They also want control over what they share, how they share it, and how it’s going to be managed and processed – including by third parties. Put simply, they want transparency and control.

 

Transparency breeds trust, and trust is central to the buying cycle. Be upfront and clear about your company’s data practices, and studies show that consumers will thank you for it by giving you their loyalty and business.

 

If your company or organisation is in the business of collecting its users’ data, set out the reasons for this clearly and succinctly. Brands must be forward-thinking about their approaches to data privacy and put themselves in the consumers’ shoes.

 

If you can’t answer how your customers will benefit from giving you their data, why it’s integral to their experience of a product, application, or service, and what exactly you’ll do with it once you have it, then how can you expect them to freely share it?

 

When it comes to control over their data, individuals already have several personal tools to help them manage how they share data and how they’re tracked online – from private browsers to ad-blockers. For many, this expectation of control over their privacy and data now extends to their relationships with brands.

 

The control that brands give consumers should be greater than the cover of data privacy regulations. Greater personalization, allowing customers to dictate how, exactly, their data is used and processed, should be the gold standard in consumer data privacy.

 

What’s more, when user preferences are made and communicated to brands, it’s the brand’s obligation to ensure that this choice is reflected everywhere – across their own, and their vendors’, data systems. 

 

The value of consumer data

Strong data protection practices are not just a question of brand reputation, either.  Marketing and sales teams across corporations of all sizes have faced novel challenges in recent years with the growth of privacy-first approaches taken by companies like Apple. The process of gaining access to data to build customer profiles, target activities, and inform future strategies has changed.

 

Your customers’ data is precious, and you need to earn the right to use it. If you’re transparent about how you manage, store, and share customer data – and don’t drop the ball – those same customers may well reward you not just with repeat business but with access to that crucial personal data that can help you to inform your future sales and marketing activities.

 

In a digital age where information is currency, data is traded for reassurance, credibility, and trust.

 

Modern consumers are clued up on data privacy, and businesses can’t be complacent about what is now an integral factor in buyer intent. What once was a question of regulation compliance now must be front and centre of marketing, sales, and even high-level strategic business plans.

 

Those brands with the most robust data protection policies - and who respect their customers’ expectations of transparency and control - will ultimately reap the rewards of custom, loyalty, and access to their customers’ data. And those brands who fail to keep up with the data privacy expectations of the modern, privacy-minded consumer will be left behind.

 

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Russell Howe is EMEA SVP at  Ketch

 

Main image courtesy of iStockPhoto.com