Why trust and transparency are key to understanding consumer behavior
Javier Ramirez
Liberty University
BUSI 520: Strategic Marketing Management
Muriel Wilson
January 4, 2022
Why trust and transparency are key to understanding consumer behaviour
Data privacy is at the heart of discussions surrounding business-consumer relations,
following recent news headlines about data breaches and the upcoming GDPR. The
Facebook and Cambridge Analytica scandal has put a spotlight on accountability and how
some organisations must do more to protect their consumers’ privacy. It has sent
shockwaves around the world at a time when many are already reexamining their data
protection policies in order to comply with GDPR.
A recent report undertaken by the DMA and database marketing provider Acxiom,
titled ‘Data privacy: What the consumer really thinks’, looks at consumer attitudes to
sharing their personal information, while making important comparisons to previous
research conducted back in 2012. It provides fresh insight into how willing consumers are to
share their data and what will make them more likely to do so in the future.
Consumers are happy to share their data – under the right conditions
We are in a new era of data privacy. Consumers are now calling for something that
has been a guiding principle of the DMA’s Code in the UK for many years, which is to ‘Put
the customer first’. Questions have been raised about whether major data breaches and
increased discussion surrounding our personal data is impacting consumer anxiety over how
their information is used and managed. In fact, the DMA’s latest research shows that
consumer attitudes are changing in a positive way.
The research found that almost two-thirds (61%) of consumers are happy with the
amount of personal information they share. By far the most important factor for consumers
in deciding to share their personal data is whether they trust the organisation. In fact, 54%
of respondents ranked this option in their top three considerations for data exchange. Trust
in an organisation remains the dominant prerequisite when engaging consumers within the
data economy. Transparency also remains a key additional precondition for consumers to
engage in information exchange with organisations – 88% of respondents claim that
transparency about how their data is collected and used is important when sharing their
information with a company.
Interestingly, the report also found that there is an important change happening to
people’s attitudes to the importance of data sharing. The research found that more than
half (51%) of consumers saw data as essential to the smooth running of the modern digital
economy, up sharply from 38% in 2012. This highlights continued growth in the awareness
and understanding of the UK public towards the role and value of data exchange in modern
societies.
UK consumers demonstrate growing interest in a range of incentives for data
sharing, particularly personalisation, recommendations and access to exclusive
events/content. For example, the number of people who claim they would be more likely to
exchange their personal information in return for personalised products or services has
risen from 26% in 2015 to 34% in 2017. In addition, the number of people who would be
more likely to exchange data in return for personalised brand recommendations has
increased from 20% in 2015 to 31% in 2017. For a more valuable, positive customer
experience, consumers clearly understand that they must trade access to their personal
data for relevant opportunities in return.
A generational shift in attitudes towards data-exchange is underway. Younger
consumers are more likely to adopt a pragmatic or unconcerned attitude towards data
sharing and their concerns have decreased since 2012. Over 65s continue to show less
confidence in sharing personal information in comparison to 18-24s and their high level of
concern over data sharing has remained stable since 2012. Such evidence suggests that a
more nuanced and tailored approach to engaging different generational groups within the
UK data economy will be increasingly important.
Be transparent and accountable – use GDPR to build trust and improve the
consumer experience
These findings are good news for businesses, but these trends will only continue if
companies’ data privacy strategies are based on transparency and respect. GDPR highlights
how important it is for businesses to respect consumer privacy and target them with
content they have actively consented to receiving – at the same time making sure that those
who have opted out of marketing activity are not contacted against their will. If you are
collecting personal information you should only ask for what you actually need, be able to
demonstrate why you need it, and only hold onto it for as long as it is needed – then
securely remove it from your database. This touches upon another core principle of GDPR,
‘accountability’. This requires companies to consider the impact on privacy and the risks
posed to their customers before doing anything with their data. Ultimately, date sharing and
privacy comes down to three principles – obtain it consensually, use it responsibly and
manage it carefully.
GDPR compliance is an opportunity to deliver a better customer experience. It is
pivotal that organisations strive to achieve a balance between privacy and innovation. The
‘Data privacy: What the consumer really thinks’ research supports this – consumers want
businesses to provide them with a unique experience. Most understand that data sharing is
essential for the growth of the rapidly-evolving digital economy and they also show a
growing interest in the benefits of data sharing, such as personalisation.
There is no need for marketers to fear GDPR. Use these new rules as a catalyst to
become more customer-centric as an organisation, rather than thinking of it as merely a
legal requirement. Personal data is a precious resource and it must be treated in such a way
that encourages consumers to share it. Organisations must now capitalise on the
opportunity to build consumer trust by being transparent and respecting their customers’
personal information, in an age where data is key to understanding consumer behaviour.
You should always ensure the end goals and objectives are clear. Your target
audience, business objectives, challenges and end customer should be at the heart of it.
1. Set out clear objectives and goals before beginning the research.
2. Identify your target audience and market size.
3. Make sure your sample size is representative of the audience you are
targeting. This means there should be enough respondents in the research sample that
reflect, as accurately as possible, the larger target audience population.
4. Choose the most suitable market research and data collection methodologies
based on objectives.
5. Create your research questions – this is applicable regardless of which data
collection method you choose.
6. Ensure the questionnaire is neutral and is not leading. Remain impartial
throughout the process.
7. Build in questions that validate other parts of the questionnaire.
8. In a qualitative focus group setting include open ended questions and allow
for flexibility for respondents to freely speak on a topic that might not have been covered in
the questionnaire.
9. Once data have been gathered employ robust analysis skills to interrogate
and decode the findings.
10. When research findings are determined, make sure to not take these in
isolation. Examine the macro environment also (such as language, cultural, economic,
political situations) to validate the findings.
Does Market Research work?
In short yes, absolutely. There are enough examples out there of product and
business failures simply because enough market research was not done from the outset.
Planning to launch a new product, or export to a new market without adequate research is a
recipe for disaster. You need to really understand your customers and your competitors
before making such a leap.
With more and more companies exporting to many global locations it’s important
to be aware of the cultural and language differences in those markets. So, while research in
one geographic location will yield certain results this may not be replicated in another
location. The famous KFC case, where their company slogan “Finger Lickin’ Good”
translated as “Eat Your Fingers Off” in Chinese is a great example of this.
However as per point 10 above, while market research will help determine our
marketing strategy and focus where our marketing efforts should lie, they should not be
taken in isolation. Take the famous “New Coke” example from the 1980s. While research
and focus groups were extremely favourable of the new coke flavour, it failed to understand
the significance of the brand affinity and nostalgia that consumers had with the original
taste of Coke. In this instance the wider environment and brand impact should have been
taken into consideration before making the final business decision.
