Data privacy "critical brand differentiator" for consumers

Data privacy is now a “critical brand differentiator” for businesses looking to acquire new customers, with consumers’ decisions to share information driven by the use of trusted channels and transparency, new research reveals.

According to the findings of the Customer Acquisition Barometer 2014, 43%of consumers prefer email as their most trusted channels for sharing information, closely followed by 42% who rated brands’ own website as their favoured route. More than four in five (85%) now will only share their information if it’s made clear that it will be used only by the company that collects it; 32% say they expect a clearly worded privacy policy before they share.

The findings follow remarks made by deputy Information Commissioner David Smith, who earlier this month told delegates at the DMA’s annual data summit that brands which make “a feature of [their] privacy approach” and are “getting in tune” with customers are to be admired.

The report also found that only one in two UK consumers (52%) claim to have willingly shared their personal information with a company in the past 12 months, in spite of marketers saying more than half of their budgets (59%) is being dedicated to customer acquisition activities – compared to just 20% on retention.

While email and brands’ website dominate in the trust stakes, social is failing to win consumers’ approval – despite marketers’ commitment to it. Four in five (77%) of marketers said they use it for acquisition purposes, but only 16% rate it as ‘effective’. This is perhaps because 54% of consumers rate it as their least trusted channel for sharing their information.

The report, which was produced by DMA in partnership with McDowall, surveyed 1,509 UK consumers and interviewed 116 senior marketers as the first annual benchmark of current trends in and critical issues brands face in acquiring new customers.

According to Chris Combemale, executive director of the DMA, marketers must quickly adapt to the new expectations of consumers.

“Effective customer acquisition relies on trust and transparency which is undermined by some companies, organisations and institutions misusing, abusing and exploiting people’s information against their expectations and wishes.

“The most successful companies are respecting their customer’s attitudes to privacy and making trust a critical brand differentiator,” he said.