A matter of trust

Transparency is the best policy

Consumers are loud and clear about how brands can earn their trust: Be honest and transparent. When companies are obtaining third-party data to provide personalized experiences, and when they use new technologies such as AI in such interactions, consumers want them to be open about it.

“Transparency is the key,” says Littley. “Consumers will accept practices such as the use of third-party data as long as brands are transparent about it, there is no perceived misuse of personal data and consumers feel they get value from it.”

Transparency will also go some way toward regaining the trust of consumers whose data has been misused or compromised. It could even help brands salvage the trust of those who have suffered material consequences from such breaches, including financial loss.

More than a quarter of our survey respondents (28%) have had their data compromised, misused or shared without their consent by a company in the past two years. Spam has been the most common consequence, while others report identity theft, financial loss and reputation damage.

Free Spirits, probably because they have a more open approach to data sharing, are much more susceptible to breaches than the rest of the sample: 58% say they have had at least one incident in the past two years. In contrast, only 20% of the Need More Convincing group and 25% of Cynics have had at least one incident.

The gap between words and actions

Consumers’ intent to punish companies for breaches is rarely matched by action. On learning that a company had shared their personal data without their consent, 32% of respondents say they would cease interacting with the firm. But in a separate question, just 16% say they have actually done so. And few have taken active measures, such as lodging a complaint with the consumer protection authorities (10%) or requesting that the company identify whom it’s sharing data with (11%). They are more likely to simply adjust their privacy settings on the brand’s website (an action taken by 32%).

This gap between consumers’ words and their actions is no surprise to Colson Hillier. Few, he says, will take action, partly because they see it as difficult. “Until now, that has worked in brands’ favor,” he says, allowing them to capture maximum data from website or app users.

Brands cannot afford to assume that consumers will always be so disinclined to action, however, and need to take steps to build consumer trust. For example, says Hillier: “Brands can make it much simpler for consumers to control their privacy, and that will benefit everyone. Simplicity also builds trust.”

A halo of trust

When there is a breach, brands need to act quickly to restore trust. Our survey shows that after a negative data experience, consumers want the brand to acknowledge the breach, promise not to share their personal data in the future and explain what steps the brand is taking to improve its practices. All three groups, Free Spirits, Cynics and Need More Convincing, agree on this point (see Figure 8).

“It starts with acknowledgment and ownership,” says Hillier. “And that needs to be rapid—not something that looks like the company is buying time in the hope that things blow over.” Then comes educating the consumer. “‘This is what we’re doing. This is why we’re doing it. Here’s how you’re protected,’” he says. “Putting those three bullets in front of a customer will go a long way to establishing a sort of ‘halo’ of trust.”