When we think of how bad privacy practice influences businesses, we tend to focus on the legal implications. This approach often leads business leaders to try and balance the information they want to attain with what the law allows them to do. But getting privacy right goes far beyond what is or isn’t legal, with people actively demanding data-offboarding processes that are based on privacy rights but go beyond compliance. Today, privacy is an integral part of the product, brand, user experience, and customer service companies need to offer to consumers.
At the end of the day, it all comes down to trust.
Smart brands don’t acquire users, they build relationships. And as with personal relationships, trust is the foundation that ultimately leads to success or failure. Most consumers consider their digital entities an extension of themselves, and how businesses treat their data directly translates to how we treat them as individuals.
From a commercial point of view, we see nearly half of consumers will not purchase from a company that raises privacy concerns, and nearly 90 percent are willing to share information only with brands they can trust. There’s a lot to lose by getting data privacy wrong.
Today’s consumers are more aware of privacy and the ways in which companies use their data than previously. In fact, 75 percent of Britons are concerned about data privacy. The data ownership movement is growing in popularity and influence, leading to public debates and advanced regulation. Now we know that data privacy leads to greater consumer trust - it’s time to examine the various ways it can make or break how consumers feel about handing their data over to your business.
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Breaking your brand trust: important things you want to avoid
Data privacy, and the ways in which brands engage with it, have become newsworthy points - and GDPR fines are no joke. While the UK is planning on scrapping some parts of the GDPR regulation, the most relevant aspects are staying in place through the DPA. Along with these legal challenges, there is a real chance of damaging your brand’s reputation by practicing poor data privacy strategies. Here are just a few points that can damage that trust consumers place in you as a brand due to poor data management:
Making negative headlines: More than 70 percent of CMOs realize that a security breach’s highest cost is losing brand value. News on data breaches and compliance fines travel fast and far. In addition to very public headlines, research shows 85 percent of customers whose data was breached will share their bad experience with others, and 35 percent will use their digital channels to make it known. Add to that consumers’ habit of Googling everything before buying, and you’ll get a permanent reputational crisis that no PR firm can fix.
Asking for too many permissions: Companies that ask for access to users’ private information risk losing the data - and the user. Too many app permissions or personal details when signing up for a service will hurt your brand’s trust levels. About 50 percent of consumers are more likely to trust a company that only asks for the data it really needs, and nearly 40 percent will leave a company that asks for too much personal information to conduct business.
Forming an intrusive online experience: Access requests aren’t the only way brands can drive customers away. Invasive personalization methods and excessive retargeting practices will make users feel violated and harm the level of trust and willingness to engage with the company.
Collaborating with the wrong partners: Third parties put your brand trust at risk if they fail to protect your customers’ data to which they have access. Ensure that your partners respect users’ data and make sure to know exactly what they use each data type for, as 64 percent of US and 72 percent of UK customers blame companies, not hackers, for data breaches. If your business partners drop the ball, you will carry the blame and the cost.
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Gaining brand trust: What consumers expect
We’re used to thinking of data privacy as something we must comply with solely to avoid the above crisis or as a compliance issue. But data privacy is also a hidden gem of competitive advantage. There’s an opportunity here for brands to ensure that their customers feel as though they’ve placed their data in safe hands. Research finds that the top three emotions driving people to choose a brand are: interest, trust, and optimism. These emotions can turn into profit, with more than 40 percent of companies stating that investing in privacy helped them gain a competitive advantage. Here’s how companies can seize this opportunity:
Communicate and act: Let customers know that you care about their data and work hard to protect them. If your target audience is worried about data privacy, like most consumers are today, invest further efforts in solving any related issues and making your achievements known. Offering access to the data you collect about them and giving customers control over how it is managed is a great place to start. Actions speak louder than words, and the data privacy experience you offer speaks volumes.
Be proactive: Don’t wait for new regulations to set the tone and voluntarily embrace the highest privacy standards. Now that the UK is set to change how strict their data protection laws are, shifting away from GDPR, there’s a real chance to demonstrate to customers how privacy-conscious your business can remain. Learn how you can improve the data privacy aspect of your business. Studies show that 92 percent of customers want companies to be proactive in protecting their data, so use data privacy as the business opportunity that it is.
As your audience takes ownership over their data (privacy), businesses do need to own their part of the deal and look at the privacy experience they offer. If they can act wisely, they’ll earn more brand trust and value, which can translate into revenue.
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Gal Ringel, CEO & co-founder, Mine (opens in new tab)