In an era of heavy online usage, customers have come to value their privacy, especially when it comes to their personal information being collected. This has made it somewhat tricky for businesses to gather data about their customers, though the practice can lead to some significant benefits. The collection of customer data can help companies create bigger profits and more effective marketing campaigns while also increasing customer loyalty. Whether they realize it or not, customers are actually happier and have a more satisfying experience when their data is collected. But even with this in mind, many consumers are wary of giving out sensitive personal information, especially in the wake of large security breaches like those at Target and Home Depot. Businesses have a big hill to climb to maintain customer trust, especially as they collect more information than ever before with the growing prevalence of big data. Many customers are willing, but organizations would be wise to follow a number of precautions.
Some data collecting methods have been around for a long time. It’s not uncommon for many companies to keep the names and mailing addresses of their customers on file for use in future marketing efforts. The same holds true today and may represent the start of further data gathering that can form the foundation of future trust building practices. In essence, it’s important for businesses to start simple, only gathering the most basic information about their customers to establish those beginning levels of trust. Once that’s been done, businesses can go deeper with more big data collection that will help them gain a better insight into the motivations, behaviors, and lifestyles of their customers.
One way that businesses can gain their customers’ trust is through a customer information privacy policy. Many companies already employ this practice in part out of legal concerns, but while some may think customers don’t bother to even read a privacy policy, that’s not always the case. A study from Forrester shows that 44 percent of consumers say they didn’t complete an online transaction due to something they read in a privacy policy. This example illustrates an important point when it comes to privacy policies: they should be clear, easy-to-follow, and always accessible by consumers. Privacy policies need to plainly outline exactly what data will be collected, how it’s collected, what that data will be used for, and how it will be shared (if at all).
Research has shown that when companies are upfront about how they’ll use customer data, customers are more willing to share, especially if they understand how it might benefit them. One survey from Accenture is evidence of this, with 64 percent of people saying they’d rather have companies use data to present relevant information and better deals than stop tracking data altogether. If customers share their data and end up getting spam messages and irrelevant offers, they’ll grow annoyed quickly and lose trust in a company.
Of course, once that data is collected, customers want to know that the data is being protected. That’s why all companies gathering data and storing it on-premise or in a Hadoop cloud need to work hard to secure that information. These efforts should include data encryption and a detailed cyber security plan. Companies may even feel they should hire a data security specialist. Whatever methods they choose, businesses should also reassure customers that they are doing everything in their power to protect their personal information. If security efforts are extensive, customers will have more trust in having their data collected by a business.
Many businesses also gather customer data to sell to third parties as a way to earn some extra money. This can easily bother and even anger customers, so any data sharing should only be done once a customer has given his or her permission to do so. Companies should also always give customers the option to opt-out of such agreements if they decide it’s no longer worth it. At the same time, businesses need to ensure third parties are able to protect sensitive data.
Earning a customer’s trust is no easy thing. Keeping that trust may be just as difficult. When it comes to trust, the one word every business should keep in mind is transparency. If businesses are open about their data gathering and usage practices, customers will trust them more. Customer data can be extremely valuable to a business, but it’s not worth it if customer trust and loyalty deteriorates as more data is gathered. An open policy and clear communication will help companies maintain that trust far into the future.
