Trust is essential to customer retention—in fact, our new survey reveals that four in five consumers have stopped doing business with a company after disapproving of their data practices[*]. But maintaining consumer trust has never been more complicated.
Today’s marketers are facing big changes from lawmakers, tech giants, and consumers alike that are impacting how they collect, store, and use data. Specifically, marketers are facing the decline of third-party cookies, new and evolving privacy legislation, and heightened privacy expectations from consumers.
These challenges are probably why 82% of marketers tell us they’re concerned about data privacy as it relates to marketing practices. And they’re right to worry—our research has uncovered four fundamental disconnects between the way marketers are managing data privacy and what consumers will tolerate regarding:
Data collection practices
Read on to learn how business leaders like you can resolve these issues before it’s too late.
Where’s the disconnect? Consumers want more control over how companies use their information, but most companies aren't providing clear or easy options.
Consumers take their data privacy seriously and a strong majority (68%) say they want more control over how companies collect and use their information.
Today’s consumers are increasingly savvy about the amount and type of data that companies collect about them. From browsing behaviors to location tracking, consumers are constantly monitored by every company they interact with online, and they’re taking it personally.
A full 84% of consumers say that the way a company treats their data reflects how they’ll be treated as customers. And it’s not just talk. Four in five consumers (82%) have stopped doing business with a company because they disapprove of their data practices—half of this segment have done so multiple times.
Despite all of this, just a third (34%) of marketers say their company currently offers customers the option to access, rectify, or delete their data. Only 37% of marketers say their company allows customers to opt out of data sharing—and a third of those who do allow it say it’s not easy to do.
If your company processes the data of consumers in protected jurisdictions (e.g, California), some privacy controls may be required by law, such as the right to know what personal information is collected, the right to delete personal information, or the right to opt-out of its sale.
Failure to comply with privacy regulations can result in heavy fines and reputational damage.
To better understand whether regulations apply to your business, check out our guide: "What You Should Know About Internet Privacy Laws"
To gain customer trust and maintain loyalty, your company must give consumers more control over how their data is collected and used. A clear and seamless opt-out for data sharing is essential, as well as providing transparency about personal information collected and the ability to delete it. These actions assuage consumer privacy concerns and help to build confidence that your company is handling their data responsibly—all essential components of the trust equation.
Where’s the disconnect? Consumers are searching for companies that value their privacy, but most businesses aren’t giving them what they’re looking for.
More than half of consumers (51%) tell us that they often or always seek out privacy-focused companies online. An overwhelming 90% say they factor a company’s data privacy practices into their decision to do business with them, at least some of the time.
Seventy-nine percent of consumers feel it is important for companies to indicate compliance with relevant industry regulations, but less than a third of companies (30%) explicitly state compliance with them. Compliance fatigue is a contributing factor with a majority of companies (54%) finding that privacy laws and regulations change so often, compliance is unrealistic.
While consumers say that minimal collection of data is a top important factor in gaining their trust (85% rate it as very or somewhat important), only 33% of companies say they engage in minimal data collection. Making matters worse, 45% of marketers feel it is acceptable to ask customers for information unrelated to their company’s product or services.
Most of the privacy expectations shown above are simple to fulfill and will make consumers more likely to engage with your business. Take guest checkout, which the chart above shows a 53% chasm between availability and consumer expectations. Our 2022 Online Shopping Survey [**] found that guest checkout is by far the most popular option among consumers for online purchases. And if that’s not enough, more than a third (36%) would abandon their cart if forced to create a new account.
Your company must assess the level and type of customer data it collects, and consider limiting collection of information it isn't actively using or that isn’t relevant to improving products/services. You should also strive to meet basic privacy expectations such as providing explicit detail about your use of consumers' data and how it’s being protected.
Where’s the disconnect?Consumers are willing to share an array of information, but marketers are primarily focused on demographics.
Our research identifies several conflicts between marketing priorities and the types of data consumers are willing to share, the most striking of which is customer sentiment data. An overwhelming 85% of consumers are willing to share sentiment data—41% are very willing. Meanwhile, only 36% of marketers say their company actually collects sentiment data.
Sentiment data’s 49% gap between consumers’ willingness to provide it and percentage of marketers collecting it is a clear outlier compared to all other types of data collection that are far more congruent.
Customer sentiment data is information that is willingly provided, such as product reviews, social media comments, or customer survey responses. Once you’ve collected customer sentiment data, you can apply sentiment analysis techniques that provide sophisticated understanding of how customers feel about your company and its offerings. This information is also known as zero-party data which is a subset of first-party data and a key component of post-cookie marketing strategies.
In fact, 69% of marketers say that they have already made significant to moderate changes to their 2022 marketing strategies as a result of Google’s third-party cookie deprecation (where the company will phase out support for third-party cookies in its Chrome browser by 2024). Another 40% have changed the types or sources of customer data they collect in response to data privacy regulations.
Marketers are missing out on the opportunity to get more nuanced and valuable customer insights regarding their products/services. Sentiment data has many benefits such as boosting customer engagement, gaining competitive intelligence, and improving products/services. You can take advantage of customer experience software to simplify customer sentiment data collection and automate sentiment analysis.
Where’s the disconnect? Marketers struggle with regulatory awareness even more so than consumers, making each group vulnerable.
Who should be most responsible for protecting data privacy? Consumers and marketers both believe the government bears the most burden but far more marketers think the federal government should be doing more (or as we’ll see below, assume the federal government actually is doing more). Compared to marketers, nearly twice as many consumers view individuals as most responsible.
Fewer than half of marketers surveyed consider themselves very or extremely familiar with the California Consumer Privacy Act (CCPA) or the EU’s General Data Protection Regulation (GDPR), the two most important comprehensive privacy laws on the books. Intriguingly, consumers show slightly more familiarity with these regulations than marketers.
What’s more, a full two in three marketers (67%) incorrectly believe that the U.S. has a comprehensive federal privacy law—only 56% of consumers made the same mistake. While five states have passed comprehensive consumer privacy laws, the U.S. still has not passed one at the federal level.
However, that might soon change if the American Data Privacy and Protection Act (ADPPA) is passed into law. The bill has found bi-partisan support and stands to be the country’s first comprehensive data privacy law.
Ensure that your marketing team is up to date on established and emerging data privacy regulations, not only for costly compliance reasons but also to understand the legislation shaping (and being shaped by) public opinion and consumer behavior. And even if your company is not currently affected by privacy laws, proactive compliance with widely-adopted regulations such as the GDPR sends a positive signal to consumers and helps to prepare your business for when new laws inevitably arise.
Today’s consumers are looking for companies that respect their privacy—they are also well aware of the marketing practices used by those that don’t. The best way to resolve privacy disconnects and cultivate trust from consumers is to reconsider your company’s approach to data collection and privacy options.
Take the following steps to to get ahead of the competition and mitigate risk to your brand:
Give consumers more control: To earn consumer trust, this is an important one to get right. Businesses need to gain explicit consent from customers to use their data and make sure they have the ability to opt in or opt out of sharing.
Be transparent and explicit: Behind every great relationship is solid communication; marketing is no different. It is essential for businesses to explain (in everyday language) how customer data is being collected, used, and protected.
Adjust your data collection strategy: Keep in mind that when permission is granted to use customer data, it doesn’t mean a free-for-all. Savvy marketers limit the amount of customer data being collected by prioritizing only what they will realistically will use for targeting, strategy development, etc.
Stay up-to-date on data privacy regulations: It’s true, companies are struggling to keep up with compliance requirements. Stay current by following blogs, newsletters, or organizations that cover data and privacy policies. If your organization has a legal team, you can request an audit to ensure your business is compliant and adhering to all the latest laws.
For more marketing advice, check out these additional resources:
* GetApp’s 2022 Privacy-Focused Marketers Survey was conducted in April 2022 among 299 U.S. respondents to study marketer actions, attitudes and reactions towards data privacy. Respondents were screened to work full-time in marketing, advertising, sales, or IT departments and have some level of involvement in marketing-related activities.
GetApp’s 2022 Privacy-Focused Consumers Survey was conducted in April 2022 among 909 U.S. respondents to learn more about consumer preferences and behaviors regarding online privacy. Respondents were screened to have shopped online at least one time per week.
** GetApp’s 2022 Online Shopping Survey was conducted in March 2022 among 770 U.S. consumers who shop online at least once each week to learn about preferences toward ecommerce account registration and online checkout processes.
2. The American Data Privacy and Protection Act, Congress.gov
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