Marketers must be proactive on data privacy to maintain customer trust
Research from Google highlights the importance of having a good privacy strategy and offers advice for brands to help put customers in control of their data.
Think consumers don’t care about data privacy? Think again.
The internet has reached a critical moment. People are spending more time online than ever before; they want to know that they can browse the web privately; they want to feel in control of the personal data they share with brands; and they expect the services they use to take care of their data to earn their trust.
Brands have a duty to consumers to exceed their expectations around data privacy – or risk losing them to a competitor who can provide a better experience. That’s according to a study from Google and Ipsos of 20,000 Europeans. By losing your customers’ trust, you could be losing business too.
“Getting privacy right can significantly benefit both consumers and companies,” says Maxwell Minckler, senior market insights manager EMEA, Google. “Brands need to go beyond the basics to provide truly positive privacy experiences and there are clear, tangible actions advertisers can take to achieve that. This means letting people know why their data is being collected, what it will be used for, and how it is improving their experience. All these factors combine to create transparency and build trust with your customers.”
Get it right and consumers are likely to thank you for it
The study found that providing a positive privacy experience can increase share of brand preference by 43%. Brands that make consumers feel in control are likely to benefit most; with 71% of people preferring to buy from brands that are honest about what data they collect and why. This figure rises to 82% among the self-described skeptics on the data brands collect and the ways they use it.
While the findings were consistent across countries and several industry sectors. Travel (49%) and retail (37%) saw strong increases in preference for a second-choice brand who offered a positive privacy experience.
With this feeling of control, people are finding advertising more relevant – most prominently in the insurance (+13%) and telco (+11%) industries – with potential increases in brand trust, positive emotional response and perceived relevance to ads shown.
Those who were more aware of how data sharing works were 36% more likely to agree that data sharing in return for more relevant ads presents a fair value exchange, signaling a need for brands – beyond their legal obligations – to clearly articulate why they are asking for data and how they intend to use it, to deliver more helpful, relevant and engaging experiences.
Get it wrong and they might switch elsewhere
On the other hand, the negative impact of a poor privacy experience is considered almost as severe as that of a data breach. This suggests that brands should pay just as much attention to privacy as they do to data security.
When customers were exposed to a hypothetical negative privacy experience, their brand trust for handling personal data decreased by 35% versus 44% for a similar scenario that also included a data breach. “That kind of negative brand impact can be difficult to repair,” says Minckler.
The consequences of this extend to brand selection as well; 39% of participants saying they would switch brand loyalties to a second choice brand in response to a negative privacy experience with their preferred brand. This was most significant for travel (44%), consumer packaged goods and insurance (both 40%), telco (39%) and retail (32%) brands.
Take no shortcuts when it comes to privacy
When customers feel in control of their data, they’re more likely to trust brands with that data. When they don’t, they are more likely to be skeptical about the way a brand is handling their data – even if it’s a brand they like. But ‘feeling’ in control means more than ‘being’ in control.
While privacy tools that allow people to change their cookie preferences or unsubscribe from email marketing can help keep customers in control of their data, these tools alone are not enough to give them the feeling of control that they need to trust a brand and its data practices.
The research highlights a number of privacy practices that deliver increased feelings of control, including how and how often customers want to be reminded of privacy settings (+14%), sending a privacy digest via email (+9%), providing emotional benefit for customers when personalizing a website (+9%), asking for consent to personalize a website (+8%) and pledging to treat customer data in a fair and honest way (+6%).
“In our experiment we tested nine practices marketers could use which offer opportunities to impact a consumer’s privacy experience,” explains Becky Ferguson, research director at Ipsos. “The majority had a positive impact on feelings of control but one simple principle that cuts across is asking people how and how often they would like to be reminded of their privacy settings. Within our experiment these appear to be effective at boosting feelings of control, positivity toward the brand, and willingness to trust that brand with data.”
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Asking people for consent to personalize website content is a legal requirement in many places, but there are benefits for both consumers and marketers in exceeding those legal requirements and customers’ expectations. Making consent prompts simple and easy to understand in clear concise language that shows people that they have control of their privacy, advertisers are entering a gateway for a mutually respectful data exchange that consumers want.
“Adopting privacy practices that are meaningful, memorable and manageable – particularly in combination – will help brands not only to put people in control, but ensure they feel in control during the customer experience which, in turn, boosts trust in sharing data with a brand and marketing effectiveness,” says Minckler. “Different companies can do different things of course given their capabilities, sector and offerings but the more practices you can do, the stronger the benefits for both customers and marketers – and that’s a win-win scenario.”
To discover more insights from Google’s ‘Privacy by design’ research, including the marketing effectiveness impact of different privacy practices, visit here.
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Google is committed to helping businesses thrive in a privacy-first world. The technology giant works with thousands of businesses and agencies to help them prepare for a future without third party cookies. Using privacy-preserving technologies, built on machine learning and automation, it can fill reporting gaps and understand people’s needs in a privacy-centric way.Find out more