Many consumers are beginning to be aware of the fact that privacy is a real issue and is under threat from the actions of big business and governmental agencies. The three-way love triangle between big data, marketing and privacy is complicated. Forbes insights and Turn, a marketing software and analytics platform, conducted a study which found that while many of us care about privacy, what really keeps us up at night is actually security issues. The report was titled “The Promise of Privacy: Respecting consumers’ limits while realizing the marketing benefits of big data.”
You can’t blame consumers for thinking that companies know far too much about us, and when their systems are compromised our identities are at risk. 2013 has definitely been the year of privacy fears, exacerbated with cyber criminals becoming bolder and sophisticated in their approach.
Given the sensational headlines this year concerning Edward Snowden, I find it surprising that the report concluded that Consumers value their privacy – just not in quite the ways most business executives assumed. The research drew on a unique combination of three interrelated surveys, one targeting corporate marketing programs and then one for each of two distinct customer segments, business to consumers (B2C) and business to business (B2B). Detailed quantitative findings are further illustrated with interviews from leading companies, privacy-focused industry groups and customers.
Bruce Rogers is a chief insights officer for Forbes media. While acknowledging the fact that most business executives believe that their customers are concerned with personal privacy, he says “feelings about privacy are actually far more nuanced, so much so that in many cases, executives may be mischaracterizing and generally overstating actual customer angst.” Failure to grasp such nuance in personal privacy and respond appropriately, says Rogers, “can limit opportunities as well as increase risks.”
Key findings include:
• Most companies are actively pursuing data-driven strategies, which are becoming the norm. Four out of five executives say their data programs are meeting or exceeding ROI targets.
• Companies and customers have differing perceptions of when actions are observed. Customers tend to overestimate how often their behavior is tracked on websites, yet they underestimate how much information is gathered during in-person interactions.
• Companies believe customers are willing partners in the exchange of information. Consumers do seem content with the exchange, even though they believe that businesses gain the lion’s share of the value. What consumers fear is a privacy breach or the misuse of their data.
The findings show that while customers value their privacy, they are still willing to share information with brands that the trust and that trust will continue until there’s an incident that forces them not to. We all know privacy is a double-edged sword. The attitude of consumers is that they will offer information in exchange for improvements to their online experiences such as discount offers.
When privacy breaches rears its ugly head, this creates disastrous results that will reverberate long after seals have been lost. The lesson here is to ensure that all data collection strategies are totally transparent and understood by those buying into your brand. The report states that 76% of B2C customers indicate they notice that in exchange for sharing information, they are receiving more relevant discounts and offers. Other clearly perceived benefits include recognition as a valuable customer and loyalty awards.
Meanwhile, members of the European parliament have recently backed draft rules on data privacy in the first concrete EU response to the revelations of mass digital surveillance by the US and British spy agencies. The new regime would curb the transfer of personal data to US business entities.
Hayden Richards is Contributor of IntelligentHQ. He specialises in finance, trading, investment, and technology, with expertise in both buy-side, sell-side. Contributing and advising various global corporations, Hayden is a thought leader, researching on global regulatory subjects, digital, social media strategies and new trends for Businesses, Capital Markets and Financial Services.
Aside from the articles, interviews and content he writes for IntelligentHQ, Hayden is also a content curator for capital markets, analytic platforms and business industry emerging trends. An avid new media explorer Hayden is driven by a passion for business development, innovation, social business, Tech Trading, payments and eCommerce. A native Trinidadian, Hayden is also a veteran, having served with the Royal Air Force Reserves for the past 10 years.
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