Data collection causing trust tensions amongst consumers

The trust gap between consumers and companies continues to widen as concerns around how firms use their personal data are growing stronger. A recent report by Orange found that only 6% of respondents felt consumers benefit the most from data sharing, while 67% believe it is the companies instead. The study also revealed that consumers judge their personal data to be worth £140, with this figure increasing to £200 if it is being shared with a company they are unfamiliar with.

The findings match those of Orange’s previous report on the subject, published in February this year. That study found that 78% of consumers find it difficult to trust companies using their personal data, while 82% feel they have no say in what firms do with it. Moreover, nearly a third, 29%, have less faith in companies than they did a year ago. These studies suggest that consumer trust in data collection is declining severely.

If this trust gap continues to widen and results in a steady increase in the number of people refusing to share personal data, it could pose further challenges for marketers and researchers. Especially if they read comments made recently by the inventor of the world wide web, Sir Tim Berners-Lee, who spoke out against advertisers ‘spying’ on people. Most consumers – 80%, according to the recent Orange report – know their data is valuable to companies, while 78% believe their value increases the closer they are to a firm’s ideal customer profile. As an example, they believe the average cost for email addresses of five people they know is £16.67 for an unfamiliar organisation. With this mindset, they are unlikely to want to give away their data for free.

To reduce consumer concern, companies need to make clearer the benefits for those who share their data. Targeted advertising divides opinion amongst consumers, who generally only approve on the occasions when they actually make a purchase off the back of it, so this alone is certainly not enough. The two Orange reports recommend three solutions – transparency, giving consumers control of their own data and educating them about how to do this.

We recently discussed on the blog how Walmart and wearable devices are letting customers analyse their own data and this is a step in the right direction. Berners-Lee, who uses Facebook’s fitness-tracking app Moves, approves of this type of personal data usage too. There are some remarkable uses for data collection – in 2011, a motorist got out of paying a speeding ticket at court by using his GPS tracking information collected by Google’s My Tracks app to prove he was driving the speed limit. In order to regain consumer trust, more companies need to make sure that their customers also profit from data collection and that these benefits are clearly communicated.