Consumers value their privacy – just not in quite the ways most business executives assume. Understanding the nuance can lead to greater customer insight, more targeted and effective marketing as well as a reduced risk of privacy breaches.
This is the overriding message from the just-released report from Forbes. The research draws on a unique combination of three interrelated surveys, one targeting corporate marketing programs and then one for each of two distinct customer segments, business to consumers (B2C) and business to business (B2B).
Understanding the price of privacy
Bruce Rogers, Chief Insights Officer and head of the CMO Practice for Forbes Media, said that most business executives are right when they believe that most of their customers are at least concerned about personal privacy but that feelings about privacy are actually far more nuanced, so much so that in many cases, executives may be mischaracterizing and generally overstating actual customer angst. In that sense, failure to grasp such nuance in personal privacy and respond appropriately can limit opportunities as well as increase risks.
Currently, 3 in 4 corporate executives believe their customers harbor tangible privacy concerns but in the separate surveys of customers themselves, fewer than half of either B2C or B2B customers expressed similar degrees of concern. Other key findings:
• Most companies are actively pursuing data-driven strategies, which are becoming the norm. Four out of five executives say their data programs are meeting or exceeding ROI targets.
• Companies and customers have differing perceptions of when actions are observed. Customers tend to overestimate how often their behavior is tracked on websites, yet they underestimate how much information is gathered during in-person interactions.
• Companies believe customers are willing partners in the exchange of information. Consumers do seem content with the exchange, even though they believe that businesses gain the lion’s share of value. What consumers fear is a privacy breach or the misuse of their data.
What this reveals is that while customers absolutely value their privacy, they are willing to share information with brands that earn their trust. And once a consumer trusts a brand, they will continue to trust it until companies give them a reason not to.
However, privacy is a double-edged sword in that while consumers will share information in exchange for subtle improvements to their experience, such as a targeted offers or discounts, a failure to respect privacy, or worse, to commit some form of severe privacy breach destroys all trust and creates catastrophic results for a company that go far beyond lost sales. The implication is that brands will have to ensure all data collection strategies are transparent to customers.
Other key insights
The research offers a wide range of additional nuance and insight. Consider:
- 85% of business executives recognize that any significant breaches in customer data security would do great harm to customer relationships, reputation and the bottom line. And the larger the company, the greater the value of its intangibles (e.g., brands) and therefore the greater value at risk.
- 76% of B2C customers indicate they notice that in exchange for sharing information, they are receiving more relevant discounts and offers. Other clearly perceived benefits include recognition as a value customer and loyalty awards.
- 88% of B2B customers say they value improvements in products, and 87% value improvements in services – in each instance stemming from their supplier’s data-driven strategies.
- 82% of companies are taking significant steps to correlate in-house information with data developed by third-party providers.
- 81% of companies are saying their efforts in data-driven strategies are meeting or exceeding ROI targets. Companies say they are most successful in using data collection/analysis to assist with product development, pricing, website design/function and call center operation. Efforts are also paying off in terms of better-optimized marketing spending and product/service pricing
From: Forbes Insights
**Share this Magazine with your executive co-workers/friends!
Follow the Magazine:
https://businessleadershipmanagement.wordpress.com/subscribe-follow-the-magazine/ (After you have filled in your email address in the column at the right hand side of the screen, a confirmation email will sent to your email address. You will have to confirm it before subscription begins)
Follow us on Twitter:
Like us on Facebook:
**As part of the Magazine’s drive to reward subscribers/followers, we will be providing subscribers/followers special access to exclusive content which will not be otherwise available to normal visitors. Please be sure to subscribe to the Magazine. Many visitors have given us positive comments that they will be bookmarking the site, but as the system is unable to capture a working email address to which the passcodes for exclusive content will be sent, they will miss out on this content. Do note that passcodes are locked to each exclusive content, not a one-for-all access, so do provide a working email address that you check regularly so as not to miss out on them!