Consumers in SA are more likely to share their data with open and honest brands, says Charles Stretch, MD of Port Elizabeth based bulk SMS provider SMSPortal.
Data privacy has been a hot topic since the discussion and introduction of the Protection of Personal Information (POPI) Act but no one could have predicted the impact the new legislation would have on consumer opinion.
As a result of discussion and media coverage consumers have a much stronger opinion (positive or negative) than ever before, demonstrating a far greater awareness of personal information and the use of data by organisations.
60% of consumers more worried about privacy: Though there’s little research in South Africa about consumer concerns about their data, internationally it is stated that around 60% of consumers are worried about the privacy of personal information.
Charles Stretch adds saying: “Although there are no facts and figures to support this in South Africa, feedback from customers as well as what has been read in the media, consumers are concerned about the collection, use and sharing of their information. And, even more so since the creation of POPI.”
Honesty is the best policy for customer retention: Transparency in data collection has a substantial impact on consumer opinion; consumers have a more favourable opinion of companies who are honest about online data collection.
Brands can no longer afford to keep their data collection activities under wraps if they wish to attract and retain customers. Stretch comments: “Data transparency also leads to an increase in commercial opportunities, consumers more likely to purchase goods or services from a brand that is open and honest about data collection.”
Interestingly, in the US, where brands are governed by different privacy legislation, 86% of consumers state they have a more favourable opinion of brands that are open about data collection, and 78% state that this honesty would make them more likely to buy from those brands.
Manners cost nothing: It’s easy to get caught up in red tape, rules and regulations, and forget to extend customers the courtesy of asking whether they mind their data being collected, or what happens to it afterwards.
Consumer attitudes to data collection are improved if they have been asked whether their data can be stored and used. “It is easy to see why consumers would have a more positive opinion of a company that asked permission to collect or use personal information about their online activities. Think of yourself and the information you give to companies: if you understand what information is being collected, why and where it is going to be used you are far more likely to share personal details.” Says Stretch.
Targeted communications: Consumers are happy for companies to use data they have collected to show them relevant offers, discounts and loyalty bonuses, provided companies are transparent and give individuals control over their data.
This is where there is a benefit to data collection: consumers are more satisfied if they receive a good service or if brands use personal data to show them relevant advertising.
Customers who receive relevant promotions feel as though their data is in safe hands because it means the brand has carefully reviewed their data before deciding upon the type of content they send out.
Brand perceptions: The perception that a brand or company is being honest about their data collection – as much as proven transparency – that is likely to win consumer favour with many consumers basing their evaluation of a brand’s data collection on their interactions with the company.
Although the majority of consumers have a favourable opinion of brands that are seen to be honest about online data collection, few can actually give a specific example of such a brand.
At a time when many brands are pursuing customer-centric business models and prioritising the lifetime value of customers, being open and honest about data collection and use has become a necessity. Asking consumers for permission to collect data about them, allowing them to opt out, and being open about the way in which data is used, are vital to win consumer trust, increase loyalty.
Author: Kimberley Nanson
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