If you’re not trusted, you’re busted
Trust is the foundation of any relationship. Lack of it can destroy friendships and bring down governments. It connects right back to our most basic survival instincts. We avoid those we don’t trust. We grow closer to those we do.
That’s as true for the products we use and the organisations we interact with as it is for our personal relationships. For businesses, trust is the cornerstone of a brand, an almost priceless intangible asset.
Just look at the Volkswagen emissions cheating scandal. The billions the company will lose in fines and legal payouts are bad enough. Potentially worse is the hammer blow to consumer trust, the very quality synonymous with the VW brand and one the firm has painstakingly built over decades. Volkswagen is an extreme case and its problems are the result of deliberate dishonesty. But honesty and transparency are vital aspects of the everyday relationships we have with all sorts of companies, from our banks and utilities to online retailers and social media. More than ever, consumer trust is getting personal and a big part of that is our data.
The personal data economy — the gathering and exchanging of consumer information — is booming, driving innovation and growth. Like reputation and trust, data is among intangible assets that constitute as much as 84% of the market value of companies listed on the S&P 500 index.
So far, so good — for the companies holding all this information on us, at least. However, treating personal data as an inexhaustible resource to be plundered at will is a recipe for disaster.
Level the playing field
Recent reports on the state of the personal data economy by Microsoft, the Direct Marketing Association (DMA) and Digital Catapult unanimously found that consumers feel that the benefits derived from data are not stacked in their favour.
Having the upper hand in this relationship is certainly nothing for big brands to take comfort from. The data landscape is shifting fast and consumers are far from happy about this imbalance. For a start, they are becoming increasingly aware of the value of their data and, understandably, want something in return for it.
After all, as far back as 2011 the World Economic Forum was talking about personal data as being a new asset class. Headlines declared it ‘the new oil’ worth hundreds of billions to national economies. Who wouldn’t want to be in on that bonanza? Especially as the huge potential for future growth and innovation being talked about now will rely on consumers sharing more and more of their data. Why should they do that if it was only going to be used for companies’ financial gain, as four out of five polled by both the DMA and Digital Catapult felt it was.
While there has been a shift away from obstinate reluctance to share personal data as a point of principle or out of blind fear, consumers increasingly — and understandably — want to gain from doing so. While some see that gain in purely financial terms, benefit to society and improved personal experiences were bigger motivators in Digital Catapult’s findings.
This is where a genuinely mutually beneficial relationship can be forged. The more companies know about consumers, the more they will be able to create better experiences and develop new products and services that are shaped and personalised to the individual. This will only be possible if companies take consumers with them into the future, instead of trying to drag them there.
In Digital Catapult’s report, CEO Neil Crockett says: “In future, the creation of trust in the way consumers share personal data will be one of the defining competitive differentials for business.”
Time to tell it like it is
But here we have something of a chicken and egg situation. Yes, businesses will need access to more and more data in order to deliver these improved and bespoke products and services. But unless consumers are offered these things in the first place, they will have little incentive to make more of their data available to those businesses.
It is clear we will not be able to leap into this new world. We must move towards it steadily, with the onus on businesses to take the first steps to lay the foundations — and to build trust. Transparency is key. Businesses need to tell consumers what data they have and how they use it, making clear what it enables them to do. In other words, they need to make a compelling connection between personal data and the benefits they deliver to consumers. They must spell out the value exchange.
Giles Hedger, chief strategy officer at advertising agency Leo Burnett, told Marketing Magazine: “The biggest challenge facing marketing today is transparency of motive . . . What motivates brand owners, increasingly, is the rapid acquisition of customer data. This motive, linked as it is to privacy, is toxic to the very notion of trust, and brand owners need urgently to ‘de-stealth’ this component of the relationship.”
So it’s clear that cynical, dishonest use of data will be a backward step, as will failure to protect consumers from leaks, hacks and other security breaches. But make clear what sharing data can do for them and businesses might clear the first hurdle in establishing trust and, with it, loyalty. Or as Microsoft states in its report: “The brands that can unlock deeper consumer relationships will be those that can help their consumers to understand the mutual benefits of sharing data.”
Surely, those companies that pioneer this approach and make an early offer of transparency will gain a real competitive advantage. Consumers are becoming increasingly aware of the value of their personal data, while becoming more educated about how companies are using it.
Let consumers call the shots
But while transparency is vital as the first step in earning consumer trust, it is not enough on its own. Seeing what information on us companies hold and what they do with it will only be worthwhile if we have a greater say in the process. We need control.
It’s a big ask for a consumer to place complete trust in an organisation that calls all the shots while giving us no say. The DMA found 90% of the people it surveyed wanted more control over their data. Digital Catapult put the figure at 94%. So the need to give consumers more control as part of building better relationships is beyond doubt. Digital Catapult further found that a third of people would like services that let them gather up their own data, manage it and then control the process of sharing. That proportion can only increase as more people realise that such services are not only possible but exist already.
If we assume that consumers would trust themselves with their personal information before anyone else, this is surely the best foundation for the future sharing economy. Most people would certainly be uneasy about anyone other than themselves having that complete, 360-degree view of their information. Control is about sharing only that data relevant to what is being offered in return.
Wider acceptance of the potential benefits of sharing has come with greater consumer awareness of the value of personal data. Attitudes will continue to change with the generations. Sharing and collaborating is natural to millennials growing up with Airbnb, Uber, crowd-funding and for whom social media has always been a part of life.
But trust remains a barrier. It is one that a straightforward, money-for-data exchange is unlikely to solve, even if that was a sustainable business model. Trust cannot be bought. It must be earned.
Transparency and honesty along with a clear and compelling value exchange — the benefits on offer in return for personal information — are key. But what consumers really want is control over their personal data. The businesses who offer that will be the ones trusted with that data in return.
Internet of Me is supported and sponsored by digi.me
