The recent experience of Target highlights the risks to a brand of a failure to secure the personal information of its customers. Global brands such as Google and Facebook have been loudly criticized for their data privacy practices. The constant attention of the media on this matter has made data security and privacy front and center in the minds of consumers.
A recent study conducted by Radius Global Market Research shows that consumers take data privacy and security very seriously and are willing to steer their business away from companies that don’t. Consumers expect companies to protect their personal data but don’t feel that any industry or company is doing it particularly well. They accept some responsibility but are looking for an industry to take the lead. The good news for marketers is that an opportunity exists to differentiate their brands in this area – and win over new customers as a result.
How can marketers stake out a leadership position for their brands in the area of data privacy and security? Establishing credibility and trust in this area starts by:
- Educating customers on their data privacy practices in a way that provides greater clarity and ease of understanding than the lengthy, legalese-packed privacy disclosures that are currently in practice.
- Engaging consumers in a meaningful dialogue about these practices while emphasizing the responsibilities of both parties. Consumers recognize that they share in the responsibility to secure personal data but in most cases place primary responsibility on the company or industry.
- Acting as their allies in data privacy and security issues areas rather than an adversary.
Key insights from the study include:
- Online security, privacy and identity theft are considered more important than thirteen other social issues that included non-tech concerns such as health care, poverty, gun control, obesity and others. Concerns about data security, privacy and identity thefts are particularly strong with older consumers in the U.S.
- While consumers place high importance on online security, privacy and identity theft they don’t believe that any one industry or company excels in these areas. The implication for marketers is that white space exists to differentiate their brands on issues that consumers take seriously but are found lacking in the market.
- On the other hand, failure to protect consumer information can have serious consequences for a company. A majority of consumers base their purchase behavior on the perceived ability of a company to protect their personal data.
- While consumers are concerned about identity theft, many do not actively take steps to avoid it. Few consumers take even simple measures such as changing their passwords regularly. Consumers rely heavily on basic protections such as anti-virus protection and firewalls to safeguard personal information on their own devices.
- Consumers place the onus on companies to protect their personal information. They are willing to accept some responsibility – particularly with information they provide to social media sites. But they believe that companies have an obligation to consumers to protect their personal information.
- Consumers express high levels of discomfort with the access that key industries have to their personal data and even higher levels of discomfort to the sharing of information by industries.
- Financial institutions are regarded as doing a better job at protecting privacy and online data than other industries – including e-shopping, social media, wireless companies, smartphone companies, and operating systems. However, the greatest number of consumers said “none of these” industries are doing the best job. Among financial institutions, PayPal is regarded as the best company at protecting privacy and online data – better than the credit card companies, Square or Google Wallet. In the world of online retail, eBay outperforms others in perceived protection of consumer data. Other industry leaders include Verizon (wireless service), Motorola (cellphone manufacturers), iOS (operating systems) and Facebook (social media).
Jamie Myers and Mark Menne of Radius Global Market Research shared these findings and more in a Quirk’s Webinar in March. Click here to listen to the recorded version of the Webinar.