Brands know more about their customers than ever before. With insights into everything, from how they like to shop to what time they leave the house in the morning, very little is left to the imagination in today’s connected, mobile-first society. As the line between the real and digital worlds continues to blur, the opportunities for data capture are only set to grow.
This data is the lifeblood of many businesses, providing unprecedented consumer understanding, improving engagement and ultimately driving sales. But no matter how well-intentioned it is, the ability to use data effectively is being threatened by a real lack of consumer trust in how businesses use these insights. One need only look at the recent reports from The Chartered Institute of Marketing (CIM) and The Information Commissioners Office to understand the genuine public concerns around what data businesses collect, how they do it, and how it’s used.
The CIM found that 57 per cent of those surveyed do not trust companies to handle their data responsibly. The Information Commissioners Office’s Annual Track survey – a gauge of consumers’ awareness around data use – sheds some light on what’s behind this distrust, with respondents highlighting the potential for data to be stolen by criminals (75 per cent), nuisance calls and cold calls (72 per cent) and data being sold to other companies for marketing purposes (60 per cent) as the key concerns. This suspicion is hardly surprising, given the cocktail of data breaches, associated media hype and ill-advised marketing strategies that have peppered the news.
Restoring Consumer Confidence
So what can brands do to restore consumers’ faith, before it’s too late? A key part of this will be demystifying the processes behind data use. Just 16 per cent of people actually read terms and conditions before accepting them, according to the CIM – and those that do will rarely make full sense of them.
One way to encourage consumers to take a closer look is to make data policies as simple and clear as possible. How about providing a crib sheet of the main points of contention in your T&Cs, for example, to help give customers a top line understanding of what they are signing up to? Yes, it requires more consideration, but brands will benefit from being transparent and honest from the outset about the way they use their consumers’ data.
Preference centres are an optimal way of giving consumers greater control over communications, from the types of information they receive to the channels that they want to be contacted through. After all, there’s little value in engaging with consumers in a way that will ultimately drive them away. Gathering this feedback offers brands an invaluable way to better direct their communications in the future, and focus budget on channels where customers are most receptive.
As a result of this, brands will inevitably end up communicating with a smaller but more engaged audience who will have more confidence that these brands are using their data in their best interests.
Practice What You Preach
In order to allay consumer fears, brands have a duty to be transparent in how and to what end they are using data. Most importantly, they must pay more than lip service to their guarantees that it will not be passed over to third parties without prior agreement from the customer.
As with any data collection, it comes back to the value exchange. Brands need to make it crystal clear to consumers how the greater understanding of their behaviour enabled by tracking can and is used to improve the customer experience – and not just drive commercial benefits for the company.
Such reassurance can only be given if data genuinely is being used effectively. Centralising information is a crucial first step, allowing for tailored and targeted messaging that meets a customers’ need to feel recognised. Making sense of such a huge amount of information is often a complex challenge for many businesses, but breaking down data into smaller, more manageable and effective pools can help to unlock its true value – and in turn restore consumer confidence.
Used smartly and sensitively, data presents a huge opportunity for companies to help and inspire their customers along the shopping journey. It’s time to make sure those benefits are communicated to consumers.