Research from database marketing firm Transactis shows responsible use of personal data is essential to gaining customer trust and maintaining loyalty
More than two-thirds of British consumers have ceased doing business with a company and turned to a competitor because they felt the original firm had mishandled their personal data and could no longer be trusted, new research from customer insight firm Transactis reveals.
The survey of more than 1,000 consumers across Britain shows that 69% of respondents have terminated their relationship with a company within the last three years because it has handled their private details irresponsibly, getting them wrong, passing them to third parties, failing to keep them secure, or otherwise abusing their trust.
An even greater majority of consumers say they would likely take stern action against a company if confronted with similar circumstances. An overwhelming 95% of respondents to the survey say they would be ‘very inclined’ to switch to a competitor if they feel a company they are dealing with is being irresponsible with their personal details.
Companies that prove they can be responsible stewards of consumers’ personal data, on the other hand, are rewarded with customer loyalty, the research reveals. The survey shows that if a business is seen to deal responsibly with personal data and, in doing so, provide a good service, 83% of respondents say they would keep buying from that firm. Similarly, 76% of the consumers say that if they see a company is using their personal details to tailor services and offers – in other words, making effective and responsible use of their data – they are more likely to continue buying from that firm than its competitors.
Other findings in the research, which was conducted in the first quarter of 2012 and representative of Britain by age group, region, gender and social class, included the following:
• Firms that simply fail to employ personal data effectively – thus calling their responsible handling of such information into question – would see an negative impact, as 83% of consumers say they would look to a competitor if a firm ignores their individual circumstances and preferences and just sends them blanket marketing messages
• In a sector breakdown of the results, supermarkets are rated most highly by consumers in terms of handling personal details responsibly and using them to provide better and more personalised services and offers, with 84% of respondents rating them ‘good’ or ‘very good’, followed by banks (81%), online retailers (80%) and mobile phone suppliers (74%)
• Surprisingly, given that effective use of customer data is so essential to its operations, the holiday/hotel/travel sector is one of the lowest performing categories with just 45% of consumers rating them as ‘good’ or ‘very good’, and firms in financial service sectors other than banking also receive low scores when it comes to their use and care of customer data
• Women, generally, take a somewhat harsher line with companies they feel have improperly handled their personal information than men, with a greater proportion of female respondents shifting their business to competitors when a data infringement takes place, but they also are more loyal when firms prove to be responsible
• Generally, the older the consumer, the less tolerant they are of firms they see mishandling their personal data, although the 25-34 demographic is less hard-line than other age groups
Michael Green, Insight Director at Transactis, comments: “The results clearly demonstrate that consumers will not hesitate to take their business elsewhere if they see any negligent or improper handling of their personal data – in other words, if they no longer trust a firm. By the same token it is also evident that if consumers see a company using their personal data responsibly and effectively, they are far more likely to remain loyal.
“The careful and intelligent use of personal data engenders consumer confidence and, ultimately, trust – allowing a stronger relationship with a customer to flourish. When companies alienate customers and lose their confidence by handling personal details irresponsibly, however, consumer punishment is harsh and damaging, as they turn their back on a brand they feel has abused their trust. Firms that fail to learn that lesson will feel the financial impact in a very direct way.”
For further information please contact: Victoria Smith at [email protected] or Hugh Filman at [email protected]; or call 020 7402 0510.
About Transactis
Transactis creates insight from customer information and enables clients to act and communicate at an individual level. Using its unique data resources, specialist knowledge and innovative technology, Transactis delivers products and services that allow its clients to make better, faster and more informed decisions to generate greater efficiencies, profit and an enhanced experience for their customers. Honours at the 2009 Data Strategy Awards and Retail Week Technology Awards are the latest in a series of industry accolades for helping clients to maximise performance and value from their customer management investment. For more information, please visit www.transactis.co.uk[img_assist|nid=264414|title=Transactis|desc=|link=none|align=left|width=100|height=39]
