Breaking the data privacy paradox

The digital age has given rise to more opportunities for brands to offer personalised experiences than ever before. Take online music and video streaming services, for example – Spotify, YouTube et al all show custom home pages to individual users. Relevant suggestions from their vast content libraries are offered up based on user interests, likes and dislikes, and previous interactions. 

Meanwhile, retail giants such as Amazon and ASOS show tailored product recommendations to users based on a combination of factors including purchase history, interest and demographics. Most would argue that the ability to personalise offerings in this way offers a vastly improved customer experience. It’s also mutually beneficial, saving users’ time while increasing the potential for additional sales for brands, along with increasing time spent on platforms.

The privacy paradox

Of course, brands rely entirely on customer data to provide these personalised experiences for consumers. And in recent years, a number of factors have led to rising concerns among the general public about how their personal information is accessed, stored and used. Instances of data breaches, overzealous data harvesting and sharing data with third parties have given rise to serious (and understandable) reservations over data sharing. 

While it’s fair to say that not every organisation is guilty of taking a cavalier approach to customer data collection, a privacy paradox has been created. Consumers now appreciate or even expect relevant, tailored experiences and interactions with brands on one hand, but are hesitant to share the information that facilitates this on the other. 

Make no mistake, the blame for this can be attributed to poor decisions made by brands. So what can they do to remedy the situation and resolve the privacy paradox by restoring customer trust?

Moving beyond inferred consent

Modern consumers aren’t naive. The vast majority understand and recognise that some data sharing is required to deliver the types of experiences that they desire. The problem centres almost exclusively around how this data is collected and stored. 

A typical data collection model sees new customers or website visitors immediately confronted with some kind of pop-up requesting access to their data – often in the form of ‘terms and conditions’. These pop-ups are often specifically designed to discourage engagement from users, containing huge walls of text and dense legalese that most don’t have the time or patience to decipher. 

This usually results in one of two outcomes – either the customer selects ‘accept all’ and reluctantly gives the organisation carte blanche to use their data as they wish, or they select ‘reject all’ and sacrifice a personal experience altogether. 

A deliberately obstructive approach to data collection from brands such as the one outlined above is unethical. It also actively reinforces consumer mistrust with its ‘all or nothing’ dichotomy. In order to fix the failed inferred consent model, consumers’ data sovereignty must be restored. 

A decentralised data model

Perhaps the key factor that leads to customer data concerns is a lack of transparency from brands. After being ambushed with a data request upfront, most consumers are then kept largely in the dark about what specific data companies hold on them and how this is used. 

However, a few trailblazing brands including Uber and Mercedes are revising this approach by providing access to data dashboards. These interactive platforms allow consumers to view the data that the company has access to and alter permissions based on their preferences.

If others were to follow suit, this would serve the dual purpose of providing complete transparency over the data that brands are storing about consumers, while granting them the autonomy to decide whether to permit this usage on a case-by-case basis. People would be able to weigh up the benefits and risks associated with data sharing and strike the balance that best suits them. In taking these steps, brands could gain significant ground with regard to becoming trusted entities once again. 

In the long term, a totally decentralised data model where consumer data is held by an independent third party would represent the ideal outcome. But in the meantime, user dashboards would serve as a significant upgrade to the current situation. 

Clearer communication is required

When people are evasive and vague in everyday conversations, it usually rings alarm bells in relation to their trustworthiness. The same is true of brand interactions. Many of the consumer concerns about data usage could be alleviated with clearer communication about how it will be used. 

Establishing an open and honest dialogue would be the second key step in rebuilding consumer trust around data usage. A clear message of “if you share X data with us, we could improve your experience by doing Y” would provide consumers with all the information they need to make an informed decision.

By improving two key pillars of their data policy – transparency and communication – companies can take a more ethical approach to providing the personalised experiences that their online audiences desire. Alongside this, a reputation as a trusted provider will work wonders for both customer retention and attracting new business.