Consumer trust comes tempered with dose of reality

The latest study from fast.MAP shows consumer confidence in sharing personal information has risen for many sectors but the motivations behind this willingness has changed.

nectar

Marketers have regained the trust of consumers in 2012 in persuading them to provide access to their personal data, after a big drop in confidence in 2011. But brands must still beware of data breaches, poor security and lax privacy safeguards, warns the latest Data Tracker research from fast.MAP, commissioned by the Direct Marketing Association (DMA) and sponsored by Equifax.

Members of the public are more relaxed than last year about handing over their personal details to brands, claims the research, which was compiled in September 2012. People are most likely to provide data when buying goods online, with around 80 per cent of consumers saying they are willing to give a name, postal address or email address.

This is a vast improvement on the results of the same survey in April 2011, when only around half said they would provide their name when shopping online. In other situations, such as joining a social network, pledging support to a charity or requesting a quote, people were less forthcoming with their data in 2011 but it appears that nervousness has lessened this year.

Laurence Hamilton, UK marketing director of credit report provider Equifax, says that brands will need to build on this progress in 2013 and reassure consumers about their privacy. He argues: “Access to, and responsible use of, accurate personal data is vital for driving commerce in the 21st century. This latest research reveals that trust and a clear privacy policy are key to consumers sharing their valuable personal information with a company.”

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The types of data that people are willing to provide to brands vary widely according to the circumstances. But it seems people are very familiar with the situations in which it is logical or appropriate for a company to ask for certain details. For example, 53 per cent of people are happy to provide credit card details for online shopping purposes, recognising that it is necessary to complete transactions, while 35 per cent will do so when donating to causes.

But people are not willing to provide the same information for services or products for which it does not seem essential. Only 2 per cent would give the same credit card details in order to join a social network, to create an email account or to request a quote, sample, voucher or brochure.

DMA chief executive Chris Combemale says: “Online platform owners and brands that market themselves digitally must understand the current range of consumer views on data privacy. They should underpin their strategies with information about what people regard as private, what details they’re willing to exchange and the circumstances in which they are prepared to do it.”

When brands request information from consumers that is more detailed than a name, postal address and email, they become less keen to provide it. In almost every situation in which people find themselves interacting with brands, these are the three pieces of information that they are happiest to supply.

One exception, which may concern charity marketers, is that only 11 per cent of people are willing to give them an email address - lower than in 2011, and much lower than the 43 per cent who consented to give this detail in 2010.

This 11 per cent is also lower than the number of people who will give payment card details or a postal address to charities. This could suggest that while they are happy to donate to good causes, consumers are becoming resistant to high-pressure marketing messages by email. Phone calls from third-sector organisations fare even worse, with only 9 per cent willing to provide a phone number when donating.

Another note of caution is that more consumers in the study say their data has been compromised in the past six months compared to the 2011 study - 23 per cent have experienced a recent breach, up from 21 per cent in April 2011.

According to fast.MAP director Paul Seabrook, this is particularly relevant in light of the security expectations people now place on brands to which they pass their personal data. He notes: “For the first time since the study began, more consumers hold companies and organisations responsible for the security of their data than consider themselves to be responsible. Brands would be wise to plan accordingly.”

If there is any reassurance to be gained from these figures, it is that more people are finding out about data breaches from the company responsible, and fewer are alerted by reading reports in the press. This might suggest that brands acknowledge their responsibilities to be transparent and react quickly in informing customers when breaches happen.

Although it might seem unlikely, given the overall reputation of their brands, financial services companies enjoy the highest level of trust from consumers when it comes to protecting their personal data. When asked to name their two most trusted sectors, 38 per cent of people opted for financial brands. Legal services and local government also do well.

Far from being provoked by the stream of bad news from banks since the financial crisis began in 2007, consumers recognise that these organisations have a long experience of handling sensitive data and are tightly regulated, even if institutions such as NatWest have suffered high-profile IT failures this year.

This suggests that consumers have astute perceptions of data security and are not overly swayed by brand reputations in other areas. Whether financial companies can build on this trust to improve brand perceptions more widely remains to be seen, as Nationwide head of customer marketing Alex Bannister notes (see Frontline, below).

But other industry sectors register less than 10 per cent of responses when consumers are asked which ones they trust most. These include utilities, entertainment, telecoms and retailers. Retailers’ poor performance on this measure seems incompatible with the fact that consumers give their information when shopping online.

nationwide

Banks top most-trusted sector to share personal information with

The contradiction could indicate that many retail brands are not considered trustworthy so much as convenient. It might also show that consumers feel swept along by the swelling tide of ecommerce, without being reassured on the safety of online shopping.

Nonetheless, according to the DMA’s Combemale, consumers are in a strong position to demand that brands respect their preferences for which data is requested. He says: “The balance of power is now tilted towards consumers. They alone have the ability to choose who they share their information with, so it’s up to brands to give them a compelling reason.

“This research highlights that brands will be left behind in the digital economy unless they are trusted, provide people with the opportunity to control how their data is used, and suitably reward consumers for sharing data.”

It seems, however, that consumer trust, rather than the promise of reward, is the most important factor in convincing people to provide personal details. Intriguingly, having a clear privacy policy is now second on that list, with 43 per cent saying it would convince them to part with their data, compared with 33 per cent in 2011. Whether consumers actually read these long documents is doubtful, but it seems to indicate that as people expect companies to provide them, making them clear and simple may provide commercial benefit to a brand.

Meanwhile, the answer that the brand “provides an essential service” has fallen rapidly down the list of reasons for giving personal data to a company. Only 31 per cent now say this would make them likely to give personal information in exchange for a service, compared with 43 per cent in the 2011 study.

Brands should take note of this research and its suggestion of a new reality where consumers are becoming more likely to punish companies that fail to be transparent in their use of data. It is also a reality where confusing privacy policies could hand a competitive advantage to rivals, even if your services were once seen as indispensable.

0 per cent

When asked which sector they trust most with their personal details, 0 per cent said political parties

23 per cent

… of consumers in the study say their data has been compromised in the pasr six months

11 per cent

Percentage willing to give charities their email address compared to 43 per cent in 2010

 

What personal details are you willing to share?NameAddressEmailPhoneDate of birthBank detailsCredit/debit card detailsNone
Creating a social media account54%19%53%9%23%1%1%35%
Pledging support for a cause53%39%11%9%3%7%35%21%
Requesting a quote67%55%66%22%21%1%1%20%
Requesting a free sample/money off coupon/a voucher66%61%62%12%13%1%1%20%
Requesting more information/a broucher68%65%56%10%6%1%1%18%
Creating an email account73%48%64%20%30%1%1%14%
Buying goods online82%77%79%38%24%14%14%11%

The Frontline

We ask marketers on the frontline whether our ‘trends’ research matches their experience on the ground

jeremy

Jeremy Henderson-Ross
Legal director, EMEA
Aimia (owner of Nectar)

We’re a data business, so if we’re not using it appropriately and we have a data breach, that will have an effect on consumer trust in how we hold that data, and on our retail partners as well. Data is now a board-level issue.

There is a difference across sectors and banks are well respected, just because of how people think they hold and manage their financial information. Equally, I think loyalty programmes fare quite well on those kinds of questions because people are used to sharing their data and it being used in a safe and transparent way. However, I think what is more important than data security is trust in how data is used and managed. We are going to see that more as we go further into the digital revolution.

If companies are doing things with data that are not what consumers expect, they need to be more up-front about it. Those who start pushing the boundaries are the ones that are going to suffer. But I suspect consumers generally think data is being shared far more widely than it actually is.

Equally important is giving value back to the consumer from their data. People don’t really understand this area, but if Google didn’t have any of its data marketing capabilities, for each user it would cost $500 a year to use its services.

You need a clear privacy proposition rather than policy; privacy policies are written by lawyers for lawyers. Barely anyone reads them. What you need is a clear proposition so that consumers are absolutely aware of how your data is used, who it’s shared with and the value you are getting back. Privacy policies should be a one-minute video, not a 60-page document.

alex

Alex Bannister
Head of customer marketing
Nationwide

It makes sense that consumers trust financial brands with data. If you ask them “Do you trust banks?”, they say they trust them much less than they did. If you say “What about your bank?”, that’s different: of course you trust that bank because it has your data and knows everything about you. It works because your bank is the expert and wouldn’t put you in danger of fraud. Can you build from that as a brand or is it taken for granted? I don’t know.

I don’t see any issue with people not wanting to give details to be kept informed [about products or services]. We launched Savings Watch a few months ago and said “please give us your email or phone number for when we launch new products”. People were willing to give us those details because they want to stay informed.

In the past our savers have said they want us to be more proactive in helping them to make the most of their money. But we can do that only if we can contact them.

There’s always been a reticence from consumers towards anyone phoning them to sell products. There’s less appetite for that than there would be for giving an email address. People don’t mind if you market to them by email because they can filter stuff out easily, but if you phone them, it is more intrusive. I don’t think that is changing.

In the future, we think people would like us to present what we know about them in general terms. It gives them a chance to say “that’s wrong” or “this was true but it’s not now”. Because we know a reasonable amount about them, they like the fact that we can be relevant and won’t badger them with stuff that’s of no use.

neil

Neil Munroe
External affairs director
Equifax

The more people get to use online services, the more trust people will have in them. Obviously, that trust will go if there are data breaches, but if organisations have got the right level of security, hopefully that won’t happen. The more online activity we have, the more opportunity there is for fraudsters but if businesses have a plan in place they can help consumers to recover that trust quickly.

If you look at what the banks have been doing, I appreciate they have other reputational issues, but they have been upping their game, telling people about new data software and introducing new tools. People appreciate the significant care and concern banks give to security, and obviously it is to protect the banks themselves as much as protect the consumers.

People need to and want to be clear now as to where their data is going to be used and how. Good brands will increasingly be making that clear, and making it clear in a very straightforward way. There have been a lot of technical privacy policies that people don’t understand and in future, it is going to be about putting it in plain English.

In future, if you are asking for data, you will need to be more clear about what you are going to do with it. We have new data protection regulation coming from Europe that has got some of these concerns at its heart. If you are clear and people can see themselves getting the right offers and services, I don’t think it will curtail data - good, trusted brands should be able to collect more data if they can prove they are adding value for that consumer by giving them better targeted services.

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