Consumer trust can take a lifetime to earn and a second to lose, but are businesses putting profit before privacy in their use of consumer data?
Compromising customers’ privacy not only carries the substantial risk of massive brand damage, but also of punitive regulatory sanctions. Nevertheless, very few companies are seriously questioning if they are handling customer information in a legal, transparent or ethical way.
Organizations have access to more information about consumers than ever before. Where they shop, where they eat, what they buy, where they travel. The list is almost endless – and getting longer every day. And therein lies the problem. With so much data available, and with the regulatory environment changing rapidly, using consumer data effectively, appropriately and compliantly is more challenging.
For consumers, the trade-off in providing this information is, on the surface, simple enough: we’ll give you our information in exchange for your service or product that makes our lives easier, richer or cheaper.
But there are limits to this trade-off. People are increasingly aware that organizations are collecting, using, analyzing and even selling their personal data to an unprecedented extent – and they are growing uneasy: when does ‘helpfully close’ cross the line to become ‘creepy and intrusive’?
In KPMG International’s recent survey, Crossing the line: Staying on the right side of consumer privacy, over half of respondents said they were happy to share personal data on gender, education and ethnicity. But less than 20 percent were happy to disclose information on their online search history, income, location, address or medical records.
At a national level, around 78 percent in India thought it was OK for taxi companies to use geo-location data to offer people a ride, compared to only 22 percent in Denmark. And 60 percent of respondents in China thought personal billboard was cool, whereas 88 percent in Japan thought it was creepy.
As the survey results demonstrate, people draw the line in very different places: one person’s ‘creepy’ is another person’s ‘cool’. Gender, nationality, age, wealth and education all play a part.
To understand this shifting landscape and minimize the risk of getting it wrong on privacy, organizations need to adopt a fresh mindset.
Gaining customer consent by mystifying them with woolly statements and 20-page policy disclaimers is not sustainable. Instead, transparency must be the guiding principle. Be up front. Say what you are going to do and then do as you say.
Done right, a proper privacy framework is not a brake on sales and marketing, but a tool to help companies better understand their customers, improve products and services and tailor them to customers’ specific demands.
It’s a massive challenge; one that many large corporates are struggling to deal with. But deal with it they must, through effective investment, efficient prioritization and definitive action.
Companies need to understand the scale and complexity of the problem and act quickly. Privacy needs to be baked into everything they do with personal information – from the moment they collect it, throughout its lifecycle. Not many organizations have grasped this essential fact, and with time and talent in short supply, those who continue to ignore the issue could pay a heavy price.
To learn more about consumer attitudes to privacy and the potential impact on your business, read our report: Crossing the line: Staying on the right side of consumer privacy’.