Will Customers Trust You With Their Data?

“Privacy is an ancient concept” said Jim Sterne, chairman of the Digital Analytics Association (DAA) and fellow ClickZ columnist at his keynote presentation at the Emetrics Summit in San Francisco last month. Sterne went on to ask the audience: “So, whom do we trust with our data?”

“Our data?” I thought. That got my attention.

I’ve been working in and around marketing data and analytics for the best part of 30 years and it struck me, possibly for the first time, that there is an increasing challenge to the implicit assumption that data collected belonged to the organisation collecting it and not to the person that it was collected from.

Two key trends

The two key trends behind this potential clash between companies and their customers are (1) the explosion in data being generated and harvested and (2) the recognition that by increasing numbers of organisations, the successful management and analysis of that data can be a source of competitive advantage.

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On the other hand, the growth of the amount of personal data being generated from mobile devices, wearables, the Internet of Things, etc. is still largely happening unnoticed by the general public. The evidence, according to a recent study published in the Harvard Business Review is that most people are unaware of the types and amount of data that is being collected on them when they go online.

However, this fact doesn’t mean that consumers aren’t concerned about the issue of who’s got their data and how it’s being used. According to the same study, over 97 percent of people were concerned that governments and businesses could abuse that data. So, there’s an apparent contradiction; consumers seem surprisingly unaware about the nature and scale of data being collected but they’re also very concerned about what might be done with it.

A slumbering giant?

To get a perspective on all of this I turned to Aurelie Pols, an independent consultant who was recently voted Most Influential Industry Contributor by the members of the DAA. She told me: “Certain customers are definitely more aware”, but that “citizens and consumers still have to make huge efforts to understand how and where their data flows.”

It seems to me that there’s a slumbering giant here of public awareness and concern that could be about to wake up. This brings us back to Sterne’s original premise; whom are we going to trust with those signals?

Transparency will be key

For a business, is developing customer trust just a question of operating good privacy practices? Pols certainly thinks it’s important and that “trust usually stems from them – for example – protecting data to avoid data breaches”. I asked Sterne what he thought and he takes a somewhat different view: “Good privacy practices implies moral, ethical and legal considerations. Gaining trust is just a matter of marketing. You can build the impression of trust without any practices whatsoever”.

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So, strong privacy practices are necessary but not necessarily sufficient, businesses need to “walk the talk” and be transparent with people in terms of what they collect, why they collect it and what they do with it. Above all they need to be able to explain the value that their customers get from that. Is it better products and services? Is it more relevant communications, or do they get a share of a revenue stream?

Being transparent is not without its challenges though, and as Pols told me, in the short term there is a danger that transparency could actually damage trust. Consumers in general are not at the point where they understand the complexities of data flows, and as Sterne points out: “Since companies cannot be clear, comprehensive and concise when explaining what is collected and how it is used (that would require years of study to understand), they can only be clear about the value that they are returning in exchange.”

I think the days’ of unfettered personal data collection are numbered. It may be a slow burn process or there could be a cataclysmic shock event that causes a public and regulatory backlash. Whichever way, businesses need to start to prepare themselves for analytics in a different era. If they want to use analytics for strategic advantage, they will have to secure access to the data through trust and negotiation. They will need to recognize the customer will retain ownership and could revoke those rights at any time. In the first instance, businesses need to start thinking about this now and ask themselves “If customers knew how you use their data, would they call it creepy?”

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