Most customers wary of location-based services

3rd Jun 2011

A huge three out of five UK consumers would be uncomfortable with businesses using location-based technology to pinpoint their whereabouts even if it led to an improvement in customer service, a report has warned.

The study undertaken by analyst company Ovum found that, despite the current hype surrounding the benefits of location-based services, consumers do not trust company’s motives and are concerned about privacy abuses.

Ian Jacobs, an Ovum analyst and report author, said: "Although many UK consumers use location-based services such as Foursquare in their daily personal lives, when brands use LBS, it is seen in a very different light."

Although to date, few companies were using LBS for customer service purposes, Jacobs pointed to "pervasive concerns about privacy" among UK consumers who "feel that their location data may be misused by businesses".

Therefore, as initial first steps to building trust, he recommended that firms become "much more transparent on how the data will be put to use and show customers some demonstrable value when using LBS for customer care".

The survey also revealed that a mere 12% of companies were currently using social media in a customer service context, with 73% of non-users saying they doubted whether they would use social media sites for customer support activities in future.

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