Jebbit’s Consumer Data Trust Index suggests that consumer trust is contingent on value in exchange for personal information.
You know what makes me happy? When Netflix recommends the perfect show for me (character-driven historical dramas with high production value, please). Or when Sephora directs me to skincare advice that’s just right for my frustrating combination skin. Or when Express knows the exact pieces that are missing from my work wardrobe.
Countless studies show that I’m not alone. Ninety percent of US consumers respond positively to personalized marketing. Eighty percent report higher purchase intent following a personalized experience, and 44 percent say a personalized experience would lead them to become repeat customers.
The trouble is that consumers increasingly distrust businesses with their personal information—the very information that makes this personalization possible. So while personalization (done well) is undoubtedly an incredibly valuable strategy for brands, it’s not just a question of putting the right operations in place. For brands to succeed with personalization, they first need to demonstrate their trustworthiness to consumers.
The big question—how? New research into the state of consumer trust suggests that the key is demonstrating value.
The State of Consumer Trust (TL;DR: Not So Great)
How much do consumers trust brands with their personal information? Not much, it turns out.
Jebbit’s Consumer Data Trust Index asks 1,000 US consumers to grade 100 of the largest consumer brands on a ten-point scale according to how much they trust those brands with their personal information in exchange for offers and rewards. On the most recent survey, conducted in Q2 2019, the average score was a mere 4.12—a downward trend from the previous survey’s 4.34, from Q4 2018. Even the highest-scoring brand, Amazon, received only a 6.03, or slightly better than neutral.
There are any number of reasons why trust is so low, not least of which is the overall zeitgeist. The Edelman Trust Barometer has repeatedly demonstrated low trust in institutions overall, a fate businesses share with government, media, and other organizations. That this mistrust should spill over into the specific domain of consumer data is unsurprising.
Still, consumer data has taken a particular bashing in the court of public opinion, with a whopping 71 percent of consumers reporting that they worry about how brands collect and use their personal information in a 2018 study by ExpressVPN. Ample media coverage of the less-than-savory aspects of the consumer data ecosystem (here’s looking at you, Cambridge Analytica) has made the average consumer more savvy and less trusting.
A steady drumbeat of data privacy legislation has also brought issues of data privacy to the public consciousness—and, crucially, it gives consumers greater control over what happens to their personal information. Essentially, data privacy legislation turns consumer data from a commodity into a privilege that consumers grant to brands and can revoke. In this environment, the cost of being seen as untrustworthy is higher than ever.
What Brands Do Consumers Trust—and What Can We Learn from Them?
A glimpse at the highest-scoring brands (even accounting for the fact that there is plenty of room for upward growth) is telling.
At a time when consumers reportedly worry about brands using their personal data, you would expect that brands like Amazon, CVS, and Google would be nowhere near the top ten. But in fact, some of the most-trusted brands gather some of the most data overall, which seems to contradict the general trend. How can both be true?
This is where the concept of a value exchange comes into play. Low trust may be the rule, but exceptions like Amazon or Google suggest that it is possible for brands to collect and use data in a way that consumers find trustworthy—it’s just that most brands aren’t succeeding. The throughline across these brands is that, in contrast to lower-scoring brands, it’s clear to the consumer how they receive a better brand experience through sharing their data. This experience might come in the form of personalized rewards (CVS), better product recommendations (Amazon), or more relevant search results (Google), but the common factor is that the value exchange is easy to recognize.
The importance of a value exchange also played out when the data was analyzed by industry. The top-performing verticals, retail and technology, are both industries in which personalization in the form of highly relevant experiences, recommendations, and rewards is both widespread and comparatively easy to demonstrate.
When asked about the motivations behind which brands they trust and mistrust, respondents’ answers were in line with the value-exchange hypothesis. In response to the question, “Which would lead you to MOST trust a brand with your personal information?” 32 percent answered, “They only store and use personal info that’s relevant to a product I might buy”—tied for first with, “They never show me ads, offers, or messages based on data I did not share.”
Similarly, consumers were most likely to distrust brands that asked for too much information.
Taken together, these findings suggest that consumers want brands to be reserved and thoughtful about how they use their personal information, only deploying it in order to provide real value for the consumer. They are open to sharing information with brands—but only if there is something in it for them.
Show Value—or Else
For marketers who want to execute a personalization strategy while also remaining respectful of consumer privacy and trust, the lesson is two-fold.
First, be judicious about what data you collect, prioritizing information you know you can use to deliver value to the consumer.
Second, bring the value exchange out into the open, making clear to the consumer how they will benefit from sharing their information with the brand.
Brands can absolutely demonstrate their trustworthiness with consumer data, but only if they can answer that classic refrain: “What’s in it for me?”