Customer Trust in a Sharing Economy, by Manish Bahl

Recently, I wrote about key from Cognizant research included in our report, “The Business Value of Trust.” The results were stark: Losing customer trust presents a major existential threat to companies. Not protecting consumers’ personal information and upholding privacy is a fast way to lose it.

However, we also learned that when consumers know a company takes responsibility for minimizing the risk of the misuse of personal data, they’re more willing to reward that company with their trust. And 50% of consumers are willing to pay a premium to transact with companies they trust.

Valuing customer trust

To succeed in today’s digital age, companies must shift from a mindset where they are focused on collecting data to one in which they are consumer-oriented, valuing consumer’s trust first. As people generally become increasingly savvy about how companies use their personal information, they demand tangible and immediate benefits in return — assuming, first and foremost, that companies keep their personal information private and secure.

An example? Consider Volvo — an automaker whose brand depends on trust in their vehicles’ vaunted safety, a value deeply embedded in its DNA. Explicit in its mission statement is its goal that by 2020, no one will be harmed or killed in a Volvo. To realize that objective, the company readily admits that it collects detailed data on its vehicles’ use — and on drivers.

Would you share your behavior and habits in a vehicle if you knew you’d help save lives? Of course. Transparency is the top factor (67%) in determining trust in a company, our respondents said; 45% said they are willing to share their personal data if a company asks upfront for it and clearly states its use.

But it’s vitally important that you know what data is gathered, how it’s used, and how it’s protected. Volvo knows that: To build safer cars, they depend on drivers’ trust.

“Show Me That You Know Me” and earn customer trust

How to build customer trust, throughout the customer journey? We recommend the following:

• Ensure that information “gives” result in “gets.” Two-thirds of our survey respondents (66%) recognize that their personal information as valuable; the same percentage (65%) are willing to share that data with companies in exchange for receiving some form of value. The majority (58%) said they expect personalized products and better customer service in exchange for sharing their data.When there are manageable, clearly communicated give-to-get trade-offs, sharing information becomes a much more straightforward exercise — with value moving in both directions. For example, visitors at The Disney Co.’s resorts and theme parks willingly share profile and location data through the MagicBand™ bracelet. In exchange, they get convenience and a sense of privileged access.
• Put customers in charge. Customers should have a 360-degree view of their information and full control over it. The Metadistretti e-monitor, for instance, allows cardiac patients to control which data on their condition goes to whom. Using a browser and an app, patients can set up networks of healthcare providers, family members, friends, and fellow users, and they retain the right to share different types of data with each audience.
• Respond quickly to failures. History shows that organizations can’t promise customers that nothing bad will happen to their digital information. Winning organizations need to recognize, understand, and proactively manage potential issues. In 2015, Vodafone quickly notified customers and banks of a cyber-attack, which helped the telecommunications company maintain consumer trust and confidence.

The sharing economy is built on transparency, and companies that are clear and honest about their use of data have tremendous opportunities to earn trust.

To do so, management needs to instill a culture, train its leaders, alter its organizational design and operating model, and evolve skills, technology, and processes to improve how customers interact with the company and its products at every touchpoint. Further, the organization must clearly articulate how their organizations will use information collected, give consumers full control of their personal data, and offer fair value in return.

What are the risks you see for being a transparent company?

Opinions expressed in this blog are of the author and may not represent Cognizant’s point of view.

Manish Bahl

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Originally published at digitally.cognizant.com on September 19, 2016.