Ethical reboot: How to handle customer data responsibly after COVID-19
Consumers have become increasingly savvy about how their data is used over the last 12 months. As we look ahead to 2021 and beyond, trust has never been more important.
A lot can change in a pandemic.
In just the last year, technological advancement and business transformation projects have made huge strides in the rush to digital-virtual that has come with COVID-19. As such, more people than ever are aware of the importance of data: that more is being generated, more is being used, and that it will play a pivotal role in all our futures.
However, rising awareness does not equate to rising understanding, and that harms trust.
Seeing an ad pop up in a newsfeed for something you’d only just searched for is described by some as ‘creepy.’ Data breaches are always big news, as are controversies. The events involving Cambridge Analytica being a prime example.
We should not be surprised that the public should question the use of data about them. However, as Acxiom's recent research into people’s comfort levels regarding data usage highlights - people are open to their data being used; as long as the ends justify the means.
Spheres of trust
The nuances around customer data can be broadly separated into three tiers which we’ve called ‘spheres of trust’.
If you think about your own feelings on your data being used, you can probably relate to these. One sphere is ‘content’: this includes basic data such as age and gender. Because the data can’t identity individuals, people are usually happy for anyone to use this data – from banks to big brands and government.
The next sphere is ‘cautious’. This includes data relating to hobbies, occupation and location. Think about the ads you get online, the ones that reflect your browsing activity. Use of this data may not cross the minds of some people, but other people do pause for thought before sharing.
The third sphere is ‘concerned’. This is when people feel the trust they place in organisations may be being stretched too far unless there is good reason for the data use. The category includes information on family, finances, health, and anything that could unwittingly be gleaned via listening devices.
As you can see, there’s a base level of information that people are content with being used. You can generally expect this to be ‘anonymous data’ which is, in fact, quite a difficult standard to reach. Acxiom's research found that two-thirds of people in the US and UK have few qualms about giving away information like age and gender.
Challenges start to arise with more ‘personal’ information that can be used to generate what some term as a ‘digital profile’ of an individual. If data isn’t used ethically, sharing data in the ‘concerned’ or ‘cautious’ category begins to cause discomfort for some.
Finance, family and health are seen as the details people are the least comfortable giving information about – and understandably so. Whether officially classified as special category or not, this data, often termed as sensitive data by a layperson, are pieces of information the misuse of which makes people naturally concerned.
Some people are hesitant to give information to retailers, as it’s not clear how they will use the data, or who they will share it with.
Honing in on one example, fear of criminal activity is one of the reasons we found there to be a suspicion towards private health insurers specifically. But some people are also hesitant to give information to retailers, as it’s not clear how they will use the data, or who they will share it with.
It will come as little surprise that social media sites are among those least trusted. That’s primarily due to high-profile cases of perceived data misuse in recent years – as well as the growing appreciation that social media sites are economically based on being able to use data to generate revenue.
The use of data in relation to social media highlights a critical nuance when it comes to data. People’s concerns don’t always marry up with their actions. People may appear cautious or even concerned about sharing data on social media but their continued rise in adoption and prevalence suggests people are willing to overcome their fears in order to make use of such platforms.
An ethical approach
The thresholds of what people do and do not consider appropriate are always changing. But still, the above categories provide a useful guide for how businesses should approach using personal data.
First and foremost, businesses should be transparent. People in general are happy to give their age and gender. But if a business is going to ask more personal questions, they should explain why they’re asking. It only takes a moment, and it’ll strengthen brand trust in the long-term. There are many examples of cases where clear transparency helps build trust, The Guardian has been hailed by many for taking the lead in this regard.
Another helpful tip is to be less granular with questions. We found that while people don’t like giving away their exact salary, they’re much more comfortable when selecting a salary band. The data gathered is still useful, but people feel much more at ease – to the extent they may even move from the ‘cautious’ to the ‘content’ sphere.
If a business is going to ask more personal questions, they should explain why they’re asking.
As much as businesses can, they should demystify any concerns around constructing a ‘digital profile.’ It is entirely understandable a business should have a good understanding of their customer. Indeed, the customer expects it. No customer wants an ad for something they have already bought, no regular customer wants to be treated as a stranger.
Indeed, even prospects would prefer not to see an ad from a company with no relevance for them. Of course, today, this can only be achieved using data and technology. Use data to create great experiences and this isn’t so bad but use a ‘data profile’ (effectively the same thing) and the pejorative term ‘profile’ causes too many to worry too much. Businesses should build trust in the data they hold to understand customers and prospects by helping them really understand the data involved, what it is used for and how it benefits them.
No regular customer wants to be treated as a stranger.
Businesses need to address the notion that it is they who are disproportionately benefiting from people’s data. People enjoy many benefits from the digitally-enabled world: better experiences, more relevance, less noise, free content, free digital services such as search and social media and more. Making it clear and simple how data makes that possible, is difficult, but necessary.
Even as we start to look at life beyond COVID-19, the world continues to change rapidly. Spheres of trust will evolve but what will remain constant is the fact that those who can build trust, to serve and empower their customers, will ultimately be those people reward with their custom.