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The latest research shows that consumers reward companies that make data stewardship a core value
It can be difficult to find issues that everyone agrees on. Ask a roomful of people if they value diversity and inclusion, and only half of them raise their hands. Ask them if they care a lot about the environment, and only 55% agree they do.
However, ask about data privacy and you’ll find much more agreement. According to a new study by MAGNA Media Trials and Ketch, a remarkable 74% of people now consider data privacy one of their top values. In every age group, consumers consistently view data privacy as their number one concern – it is valued more highly than equity, sustainability or any other ethical issue.
That degree of consensus is almost unheard of in current opinion polls. It’s a sign that data privacy really matters to today’s consumers — and that companies need to take privacy seriously, not just because it’s a legal requirement, but because it’s a core value for their customers.
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Regulatory compliance is not enough to convince consumers. In fact, consumers have little interest in the fine print of the regulations: According to the survey, more than three-quarters of people have never heard of the General Data Protection Regulation (GDPR), while 9 in 10 people have no idea what the Virginia Consumer Data Protection Act (VCDPA).
However, consumers do notice when regulators call on your business to: failing to abide by the rules. Regulatory compliance is critical: it may be the starting point for your business, but not nearly enough to convince consumers that your organization can be trusted to take care of their data.
So what can companies do to gain customer trust? The key is to look past compliance, and find ways to communicate transparently, give consumers meaningful and ongoing control over their data, and make data management a core part of your brand.
Three important conclusions from the study:
1. People worry about how companies handle data
Most consumers feel that organizations are not currently doing enough to keep their data safe. More than four-fifths of consumers are concerned about how their data is used, and only 5% are not concerned about how organizations use their data.
Worryingly, 6 in 10 consumers believe that companies routinely misuse their data, and only 21% of consumers trust their data is only used for the right purposes. In other words, it’s not just that consumers think companies are careless. They think that companies are actively breaking the promises they make when they collect data.
These suspicions appeal to consumers’ feelings of powerlessness. Nearly six in ten consumers say they don’t know where their data is going once it’s shared, and two-thirds feel they have little control over how their data is used. From there, it’s a short step to eroding trust.
2. People understand the value of sharing data with businesses
While consumers place a high value on privacy, they are also willing and even eager to share their data. Sound counter-intuitive? The reality is that consumers understand that by consenting to the use of their data, they gain access to things they care about – from more powerful products to personalized online experiences.
In fact, more than four-fifths of consumers think they benefit from sharing their data – and it’s telling that they don’t want companies fewer data. What people want instead is for companies to be diligent about protecting the data they share, and being transparent about what is collected and why. They also want meaningful options to opt out of data collection, or to change their mind and withdraw consent after the data is collected.
It comes down to? Consumers see data sharing as an exchange of value. They want to keep control of that exchange, but if you give them the security and freedom they want, they’ll give you the data you need.
3. Responsible data practices drive revenue growth
Consumers are willing to reward organizations that do this well. Nearly 9 out of 10 customers say strict data privacy practices would positively affect their relationship with a company, and a third would tell their friends about companies with strict privacy standards.
Data stewardship directly benefits the income. Nearly a quarter of consumers say they are more likely to buy from a company that takes data privacy seriously, and 15% would pay more for those products or services.
That is about half as much who are willing to pay extra for environmentally friendly products. However, consider the scale of green marketing efforts and the relative lack of consumer-facing messaging around data stewardship, and it’s clear there’s plenty of room for stronger privacy practices to drive revenue for businesses.
Respect people’s data worthiness and you will be rewarded for it
Brands invest enormous amounts of time, energy and money in areas such as sustainable marketing, diversity programs and ethical recruiting practices. They do this not just because these issues matter in absolute terms, but because they view these issues as important to their customers and want to align with their customers’ values.
The Magna/Ketch study shows that effective data stewardship should be high on the priority list of companies. Your customers speak loud and clear, saying they care about the way their data is handled — and that they’re ready to reward companies that share their values and protect their privacy.
Consumers will reward brands that handle data responsibly, with 23% more purchase intent in the US and 28% in the UK
But what does it mean to have responsible data practices? For starters, by proactively removing data when it’s no longer needed, and providing customers with meaningful insight into what you do with data and why you collect it.
Companies that fail to embrace their role as custodians of people’s data will increasingly find their customers simply opting out or doing business with other more ethical companies instead.
Bad privacy practices aren’t just bad for consumers. They are bad for business. To keep data flowing and enable innovation and growth in the new data economy, companies need to look for privacy solutions that go beyond regulatory compliance. It’s time to make privacy a key strategic priority – and find new ways to deliver the engaged, transparent and robust data governance that consumers crave today.
Jonathan Joseph is head of solutions and marketing at ketch
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Janice has been with businesskinda for 5 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider businesskinda team, Janice seeks to understand an audience before creating memorable, persuasive copy.