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Earning Customers' Trust in Our Day of Data Breaches

By Larry Alton
Business.com / Security / Last Modified: October 16, 2017
Photo credit: docstockmedia/Shutterstock

When you collect customer data, you need to build and maintain their confidence in you. These best practices show customers they can trust you with their information.

Data collection is a topic that's getting more attention than ever before. In the wake of recent breaches, consumers are wondering if they can trust businesses to protect their information from malicious hackers. You need to reassure them that you can.

Shining the spotlight on data collection and protection

Do you know what Arby's, Verifone, Saks Fifth Avenue, Chipotle, Gmail, Brooks Brothers, DocuSign, Kmart, the University of Oklahoma, Washington State University, Blue Cross Blue Shield, Verizon, Equifax, Deloitte, Sonic and Whole Foods Market all have in common? They are among the thousands of companies that have experienced data breaches this year alone.

The Equifax hack was one of the largest, and certainly received more publicity than most, but it wasn't an isolated event. Businesses that promise to protect consumer data are being targeted and ferociously hacked with an intensity that has never been seen before.

Just weeks ago, Yahoo announced that it now has reason to believe all 3 billion of its user accounts were affected by a 2013 hack. As Phil Dzikiy of Security Baron explains, "Yahoo's 2013 breach involved sensitive user information such as names, telephone numbers, and birthdates, as well as security questions and answers."

This isn't a new hack, but it does speak to just how serious breaches can be. Often, one breach has a domino effect and exposes account information for customers all across the internet.

Customers know that businesses are collecting their information. While not always crazy about the idea that companies store personal data points, most consumers choose to look past it and avoid worrying about what they can't control. However, as data breaches become more common and more publicized, the distrust is turning from a simmer to a boil.

Customers are beginning to wonder if they have more to lose than to gain from doing business with certain companies. Moving forward, businesses like yours must find ways to overcome these friction points and instill confidence.

5 ways to establish trust when collecting data

If you're collecting customer data – and every modern company is these days – then you have to be intentional about establishing trust. It's a challenge for sure, but it's not insurmountable. Here are a few specific ways you can make positive strides in this area.

1. Ask for permission.

You would never walk up to someone in person and take something without making a clear and transparent request. Why, then, do so many brands skirt the issue when it comes to gathering data? You not only need to ask for permission to collect data, you need to make sure the customers actually know what you're doing.

Many companies will make vague requests, knowing that customers aren't reading the fine print, but this isn't a way to build trust. Be clear, precise and transparent. Most customers are willing to trade information for something of value, but you have to be forthcoming.

2. Be transparent.

The second step is to be transparent with the data you're collecting and how it's being used. According to one study, 60 percent of online users want to know the why, what and how of websites personalizing content for them. Roughly 1 out of 3 customers say they would be less bothered by sharing their personal information if companies explained their reasoning for collecting the data.

Dave Jackson, CEO of Clicktools, a company that helps companies with the collection of customer data, believes this is critically important to any data collection strategy. "It's not just about what information I'm holding, it's about how I'm using that information," he explains. "And if you can show someone that you're using that information for mutual benefit, that will build trust and benefit both parties."

3. Clearly explain policies.

You need clear policies within your organization regarding how customer data can be used. Just because you collect it doesn't mean you're free to use it in any manner you want. Everyone in your company must understand what's legal and what's not.

Something interesting happens when you develop clear policies within your company. Suddenly, you don't have to skirt the issue in public. Instead, you can be more open and honest about what's going on – something that may give you a competitive advantage in a murky marketplace.

4. Keep data anonymous.

There's too much risk associated with collecting data and keeping identifiable information. To foster trust with your customers (and reduce your own risk), make sure you keep data anonymous. Thanks to different software solutions, this is easier than ever. Algorithms and clustering models can be used to establish customer segments, which removes bias, keeps data safe and builds trust.

5. Don't collect data you don't need.

You are responsible for every piece of data your company collects on customers. Why, then, would you want to collect information you don't actually need? This increases risk and forces you to safeguard data that's irrelevant to your end goals.

It's far better to be conservative than greedy when it comes to collecting customer data. It's also a lot more cost-effective in the long run. Think about this as you refine your strategy.

An issue you can't neglect

Trust between consumers and brands will always be important, but it's unfortunately at an all-time low in today's marketplace. With each new story about a data breach, customers have fewer and fewer reasons to trust businesses with their information. If you want to keep collecting data without losing customers, you'll have to find ways to build trust.

As Pat Conroy writes for Deloitte, "Rather than forgo the unequivocal value of gathering and using personal consumer data to drive targeted digital marketing, consumer product companies can seize the opportunity to build brand trust by meeting – and even exceeding – consumer expectations related to data privacy and security."

Let this article serve as the starting point (not an exclusive manifesto) in your company's quest for building and maintaining trust with customers.


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