• October 30, 2015
  • By Leonard Klie, Editor, CRM magazine and SmartCustomerService.com

Customers Value Privacy, to a Point

Consumers understand which data is most sensitive, but they are willing to share it with companies in exchange for products or services they value, according to research by the Columbia University Business School's Center on Global Brand Leadership.

Among the information considered most sensitive, consumers ranked their addresses at the top, 58 percent, followed by mobile phone numbers, 46 percent, names, 45 percent, and dates of birth, 42 percent. Other data points considered sensitive, to lesser degrees, included social networks, email addresses, Web histories, and purchase histories.

But, more than 70 percent of consumers would consider sharing that same information with companies, even when they are not required to, according to the research. The research also found that 80 percent of consumers will share non-required personal information for rewards points, and a smaller majority will share it for more experiential benefits like product recommendations. Additionally, 75 percent of consumers would be willing to share their information with brands they trust.

Age also plays a factor in how comfortable consumers are with sharing their data. Millennials are the most comfortable, at 51 percent. Generation-Xers came in second at 44 percent, while Baby Boomers and members of the Silent Generation both came in at 35 percent.

This was not really surprising, according to Matthew Quint, director of the Center on Global Brand Leadership, who conducted the research with Columbia Business School professor David Rogers. "They are digital natives, and so they are more comfortable in this [data-driven] environment," Quint says.

Quint and Rogers also identified four mindsets when it comes to sharing data: defenders, savvy and in control, resigned, and happy-go-lucky. The majority of consumers qualified as defenders (43 percent), defined as people who take actions to protect their data and are not happy sharing their information but will do so only when absolutely necessary. Savvy and in control consumers, defined as those who are smart about their data and will protect it when they need to but are also willing to share it when they perceive a value in doing so, represent (24 percent). The resigned group, representing 23 percent of consumers, doesn't like to share the information but does nothing to protect themselves. Happy-go-lucky consumers are the smallest group, at 10 percent, and comprise those consumers who are more than willing to share their data.

Quint was most surprised by the defender group and the lengths they will go to prevent marketers from getting their information. "I didn't expect this. It shows a level of savviness on the part of consumers around the handling of their data," he said.

Also surprising was the similarity between American and Canadian consumers and their counterparts in France and England, given the European Union's recent decision to strike down the long-standing Safe Harbor Agreement that allowed data sharing between Europe and the U.S. on the grounds that U.S. data protections were inferior to those in the 28 European Union countries. "The difference was not as big as I would have expected," Quint says.

The one major difference, however, was in where the data goes. "In the U.S., people tend to be very comfortable sharing information with companies and suspect of the government. It's the other way around in many other parts of the world," Quint says.

Based on the research, Quint suggests that companies invest in building a sense of trust among consumers.

"Don't dupe consumers to get their data," he says. "The more transparent you are, and the more control you give consumers over their data, the more likely they are to share it with you."

As part of that, Quint also suggests that companies not ask for data unless they truly need it and can show the value they will provide to customers with it. "Be clear and transparent about how you are using the data. Let consumers have control over what data you have and how it is used, and provide them with more value from the data," he says.

Quint identified Amazon and Netflix as two companies that have really mastered the data and privacy issues. "They are good examples of companies using data to make recommendations and drive consumers toward other things that might interest them," he says.

Another way companies can build trust is to invest in the overall quality of the brand. "If you deliver great products and services, you will get more trust from consumers."

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