The future of business is being increasingly built on data. Access to accurate data from customers—about their interests, behaviors, and identity—is vital to successful, durable relationships. But, amid rising concern over intrusiveness and security breaches, many consumers are pushing back. From ad-blockers to fake online profiles, consumers are using various means to dig in their heels and protect their data.
The question for business today is how to make data sharing a “win-win” for both companies and the customers they serve. With my Columbia Business School colleague Matthew Quint and our research partners at Aimia, we have just completed a global study on the future of data sharing. (Read the full report.) We spoke to 8,000 consumers across five countries to understand their attitudes towards sharing data with businesses in six industries: retail, telecommunications, financial services, airlines, e-commerce, and web services.
The findings of our study point to five lessons for businesses that hope to persuade customers to share valuable data:
1. Build a trusted relationship
Businesses need to start by building a trusted relationship with their customers. In 5 out of the 6 industries, a minority of consumers are comfortable with how companies handle their data. And 67% of all consumers have taken steps to defend their personal data, by limiting tracking or providing false information to companies. The good news is that brand trust has a powerful impact on consumers’ willingness to share data. Over 75% of people are more willing to share various types of personal data with a brand they already trust. This impact was seen most strongly with Amazon—a company that has built its brand not with advertising, but through customer service, reliability, and the use of data to better serve its customers.
2. Don’t see it as a zero sum game
Our study revealed contradictory attitudes among consumers towards defending and sharing their data. The same people who take defensive actions to protect their data may be happy to share it with companies for relevant value or benefits. This even extends to the data which consumers recognize as most sensitive: their address, mobile phone number, name, and date of birth. Consumers understand that this personally-identifying information (PII) is extremely useful, and they are willing to share it with companies in exchange for a product or service they value. Businesses should remember that an urge for control over one’s data does not preclude a consumer’s interest in sharing it as well.
3. Look for new ways to create value with data
It is critical that businesses use the data customers give them to deliver more value to the customer (not just to improve the targeting of advertising). Unsurprisingly, we found that consumers are most persuaded to share data by offers of direct financial benefit (think, cash back on a purchase). But companies need not rely on benefits that undermine the perceived value of their offerings. 80% of consumers will share a non-required piece of data for rewards points. And a majority will also share data for more experiential benefits, like product recommendations or a tool to help them with complex decisions. Many companies—from Netflix and Apple to startups like Billguard and Mint—are exploring new data-enabled benefits that range from improved user experiences to using data for societal benefit. Younger consumers are especially willing to share non-required personal data for these new kinds of benefits.
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