The personal data conundrum - Part 2
August 30, 2019
Customer data is an essential element of 21st century business, but the process of its collection and use is becoming increasingly difficult.
In this two part blog we explore the challenges and the potential solutions.
In the first installment of this series, we explored the impact of trust on customers’ willingness to share their personal data. In this installment we will be exploring the impact that the value exchange, along with fine tuning of the customers experience, has on their propensity to share personal data with the organisation. We will assess if these factors can have a significant impact and whether a win-win situation can be achieved.
Value Exchange - What’s in it for me?
Whilst trust is important, customers often continue to share their data with less trustworthy businesses and even after those businesses have experienced a data breach. Perhaps the value exchange that they perceive they are getting from sharing their personal data outweighs the potential negatives?
When you receive a request to share your data with an organisation online, several questions come to mind. These include, but are not limited to; ‘What’s in it for me’, ‘What will they use it for?’ and ‘How will this improve my experience with this company?’. The impact of the answers to these questions will vary from person to person. We have explored three value exchanges and how they can influence consumers willingness to share data:
- Efficiency: For your customers, it can often feel like they are filling in forms and ticking boxes each time they interact with your organisation. Customers value both their time and their personal data. Consequently, the easier it is for customers to transact or engage with your organisation, the more likely they are to share personal data with you. An example of value exchange is when customers are able to create an account which they can use to make the checkout process quicker and more efficient. 75% of our respondents said that they would be more willing to share their personal data if it meant these kinds of interactions were more efficient.
- Personalisation: Customer data can be used for personalising content. For customers, feeling like they are getting a unique experience can make them feel more valued, which in turn builds loyalty. In terms of personalisation, customers are willing to share data in return for tailored suggestions and recommendations such as what to watch next on Netflix (41%), but are less willing when it is for tailored adverts (7%). The willingness of consumers to share personal data in exchange for personalisation often depends on the sensitivity of the data they are required to provide. For example, people may be willing to share data about their Netflix viewing history to get better suggestions, but not as willing to share sensitive health data with a fitness tracking company, even if might result in access to better step tracking / calorie information.
- Financial Incentives: Customers are increasingly aware that there is a value attached to their data. Over the last couple of years it has been widely publicised that the world's most valuable resource is no longer oil, but data. We also know that the value of personal data acts as an incentive for hackers who actively sell personal data on the dark web. 86% of our respondents said that a financial incentive would make them more likely to share their data with organisations. Conversely, financial and data exchanges should be carefully managed as it can often be considered as manipulative by customers and act as a barrier to data sharing.
Fine tuning the customer experience
Although frequently subliminal, the customer’s experience and interaction with a business will impact the likelihood of them sharing their personal data. Customers are often deterred by confusing messages and lose interest if it is not easy to share data and interact with the company. Fine tuning the customer experience to maximise ease and simplicity will help increase the customer propensity to share their personal data.
- Easy customer journey: Long registration forms/effort can prevent customers granting permission for organisations to process their data. Essentially, the option to opt in should not be hidden amongst long forms and should be an easy process for customers. Data capture forms are often more effective and better received when there is limited text required. The perception of text based forms is that these require excessive time and thought. Therefore, removing unnecessary text boxes and reducing the number of clicks in the process are good measures for ensuring a smooth and easy customer journey. This will help to facilitate and ensure customers are motivated to share their personal data. Note that this may be at odds with what the GDPR is trying to achieve and as such creates an operational challenge. Pre-ticked consent boxes are not compliant under GDPR. Whilst they may be easier for an organisation to collect personal data, they do not translate to “informed consent” for the customer.
- Simple to understand: From the customer’s perspective, they want the decision to share their personal data with an organisation, to be a simple one. One study by Zipursky (2013) found that by simply removing one line of text below a sign up button increased the number of subscribers by 28%. Similarly, in a survey undertaken by Foresight Factory (published in Feb 2018), 87% of respondents said the terms and conditions being easy to read is an important aspect when sharing personal data with an organisation. A layered approach to T&C's and privacy notices increases transparency - a key objective of the GDPR - and makes the experience simpler for consumers. Layered notices provide distilled important information to the customer with the ability to easily access further details or the full notice.
Put simply, avoiding distractions and making something clear and easy can increase the propensity of customers to share their data. Simplicity does not need to be at odds with transparency. Providing key information in short and clear messages with the ability to click a link to get more detailed information will increase transparency and trust.
Is there a win-win?
We know that data has the ability to transform business performance and customer experience. So how can we realistically achieve the elusive win-win scenario? Does our hypothesis stand up? This is an area that warrants further investigation but our initial findings suggest that fine tuning the customer experience on its own will not necessarily have a significant enough impact to alter consumer behaviour. We also see trust as a hygiene factor, in that, building trust with consumers does not necessarily increase the propensity to share data but a lack of trust can have a negative impact. Instead we believe that the value exchange is key to unlocking a win-win situation for both customers and businesses alike. Customers know how important and valuable their data is and increasingly want something in return. The impact of the value exchange, if significant enough, can even outweigh a lack of trust as demonstrated by the continued use of certain technological platforms despite data breaches and adverse media attention. Organisations ultimately need to consider and balance all three factors to maximise consumer data sharing.