Companies and Consumers Clash on Privacy Issues
There exists a wide discrepancy between U.S. businesses and consumers regarding privacy and trust issues based on personal data, according to a new Accenture study. The study reveals that half of consumers will reject or cancel business with a company due to fear that their personal data will be inadequately protected.
The report found that businesses and consumers maintain opposing ideas of what generates and what undermines trust. While 43 percent of business respondents cited effective customer service as the overriding factor in positively influencing trust, 62 percent of consumers said they aligned trust with either the company's reputation or the length of the relationship. Furthermore, 74 percent of businesses blame online security fears for compromising consumer trust, while 67 percent of consumers rank aggressive marketing as the culprit.
Consumers are most likely to trust in their employers, banks, and HMO/health insurance providers, but entrust online retailers and supermarkets the least, according to the report.
What this discrepancy implies is the need for all companies to educate consumers about the type of information they collect and why. "Most consumers said they would be more trusting if companies were more forthcoming about how they use personal data," says Glover T. Ferguson, chief scientist at Accenture.
"One of the surprises of the survey was that people decide whether other people are trustworthy based on the brand they represent," Ferguson says. "You can't talk your way into trust." He elaborates by asserting what he calls the incumbent's advantage, and emphasizes the value of business reputation. "The newcomer is, by definition, at a disadvantage," he says.
Interestingly, the behaviors of consumers were found to not always be consistent with their stated beliefs about data privacy issues. For example, although nearly two-thirds of consumers expressed worry that providing personal information would result in spam emails and phone queries, more than two thirds also said they would readily share personal information in exchange for rewards like cash, convenience, and bonus points.
What Ferguson suggests to remedy the situation is that consumers express their concerns when explicitly asked for personal data, and that businesses take more careful consideration of what these concerns are.
Although the majority of businesses were found to underestimate the importance of their privacy policies and think they are unlikely to influence consumer perception, 51 percent of consumers surveyed said they avoid dealing with companies whose privacy policies make them uncomfortable. Simultaneously, consumers overestimated the amount of personal information that companies are legally allowed to collect about them, although businesses did admit to collecting some data to which they believe they are not entitled.
"There's an overall gap in information insight in business that we believe, in the next few years, is going to become the frontline in maintaining a major competitive advantage," Ferguson says.