New research dives into the trust crisis that businesses are facing, where 57% of customers are uncomfortable with how companies use their information. Published this week, the “State of the Connected Customer” report surveyed over 6,700 consumers and business buyers, exposing significant shifts in customer expectations and the dynamics of trust. In this research, “customers” is an aggregate of both consumer and business buyer responses.
The report finds that a majority of customers are wary of how their data is protected, but at the same time hungry for more personalized and contextualized experiences. Interestingly, 79% of customers are willing to share relevant information about themselves in exchange for personalized product recommendations; 75% feel the same way about connected devices or services. On the surface, this sets up a personalization paradox. How can companies personalize the customer experience if they don’t have the requisite data to create it? And what can companies do to earn the trust that’s foundational to any data collection practices?
Nearly 6 in 10 customers don’t believe companies have their best interests in mind. Almost half of customers (48%) believe companies do a bad job at protecting their personal information. This uneasiness is only growing; 63% of business buyers and 61% of consumers say their fears of data being compromised have increased over the last two years [CLICK TO TWEET]. Earlier this year, the Edelman Trust Barometer also reported a record-breaking drop in trust in the U.S.
In light of highly publicized data breaches and scandals from Wells Fargo to Facebook, it’s not surprising that customers are leery. In many cases, customers don’t understand how their data is used in the first place — 50% of consumers admit confusion around this.
But even as trust and confusion swirl, customers still want companies to use their data for certain applications.
A large majority of customers are willing to give their data when they get something in return. Often, the “something” they’re getting is a more personalized or contextualized interaction with the company. For example, 80% of customers will share relevant personal information in exchange for consistent interactions across every channel [CLICK TO TWEET]. Another 79% of customers will trade data for contextualized interactions in which they’re immediately known and understood.
Of course, highly personalized and connected experiences are only possible when a company has sufficient data to form a 360-degree view of a customer. None of this can happen without collecting and sharing data — and data sharing doesn’t happen without trust.
The relationship between trust, personalized customer experience, and loyalty is a virtuous circle. Ninety-five percent of customers say trusting a company increases their loyalty. Trust earns data, which earns the ability to personalize, which in turn earns loyalty. Eighty-four percent of customers say being treated like a person, not a number, is very important to winning their business. This is wide open territory for companies to gain a competitive edge.
The report spells out a number of practices that companies can adopt to earn trust. Control is a common building block; 92% of customers are more likely to trust companies with their information if they give them control over what information is collected about them. Data use and privacy shouldn’t be an all or nothing situation. Giving customers the ability to decide what data is used and what is forgotten is critical to building trust.
Here are some key factors for building trust:
Ask for permission and walk your privacy talk. Customers want to know that your company is committed to protecting their information, operates with solid privacy policies, and won’t share their information without permission.
Be transparent and straightforward about data use. Transparency, honesty, and openness go a long way toward earning trust. A staggering 91% of customers say they’re more likely to trust companies with their information if they are transparent about how it’s used.
Educate customers on how their data enables a better experience. Eighty-six percent of customers say they’re more likely to trust companies with their information if they explain how it enables a better customer experience. Look at your customer touchpoints with a beginners’ mind and explain in simple terms how their interactions will be easier (or more personalized or faster) if they trust you with their data.
Actually, provide a personalized experience. If you’ve ever had to jump through customer service hoops with a company you’re a loyal patron of, you know this annoyance. As a business, make sure you use the data you have and follow through on creating a superior customer experience. Seventy-eight percent of customers say they’re more likely to trust companies with their information if they use it to fully personalize their experience [CLICK TO TWEET].
Find out more about trust and changing customer expectations in the second edition “State of the Connected Customer” report.
For more insight, check out this article on why and how customer expectations have changed; this 5-point checklist for exceptional customer experience; and this article on why customer experience begins with understanding human nature.