57% of consumers don’t trust how brands use their data

In the wake of Yahoo’s data breach involving 500m personal records, it’s hardly a surprise that consumer confidence of brands and their use of data is at a low ebb.

However, what is more concerning is how little most people understand about a brand’s use of their personal data in the first place.

The Chartered Institute of Marketing’s (CIM) latest study, involving more than 2,500 consumers and marketing professionals, found that nine in 10 people have no idea what companies do with the personal information they hold.

57% say they do not trust an organisation to use their data responsibly.  

CIM’s report also highlights that 51% of consumers have received communications from companies they believe to have misused their data, with 17% saying “it happens all the time”. 70% of consumers still fail to see the benefit of sharing their personal data at all.

"Customer data is essential for marketers to reach the right audience and meet customers’ needs and interests,” says Chris Daly, chief executive of CIM. “Yet our report shows that people are nervous about sharing personal data - fears of data breaches and misuse has them on high alert. And with two thirds of marketers confessing to limiting sharing their own data as a consumer because they know how organisations will use it, this is extremely worrying.

"However, two-thirds (67%) of customers actually say they would share more personal information if organisations were more open about how they will use it.  So, the solution is clear, marketers need to brush up on the rules, demonstrate clearly the value-add personal data offers in delivering a more personalised experience and ultimately reduce the fear by being open throughout the process.”

Privacy by design

A growing call for more stringent, transparent privacy practices has led to many experts calling for businesses to think more in line with ‘Privacy by Design’.

‘Privacy By Design’ is now referenced by UK data protection watchdog the Information Commissioner's Office (ICO). The phrase is also included in the EU General Data Protection Regulation.  

The concept is based on seven simple foundational principles:

• Being proactive rather than reactive.
• Having privacy as the default setting.
• Having privacy embedded into design.
• Avoiding the pretence of false dichotomies, such as privacy vs security.
• Providing full life-cycle management of data.
• Ensuring visibility and transparency of data.
• Being user-centric.

Martin Hill-Wilson, a customer service expert and consultant, is a strong advocate of Privacy by Design, and believes brands will need to place its philosophy at the heart of their business if they are to reverse the increasing distrust consumers have about data use: 

“Access to your customer data is not an automatic right,” he says. “It’s a privileged ownership. It is not something to be acquired covertly. It is to be granted through explicit permission.”