The Next Big Change for Brands: Digital Trust
Data privacy and consumer trust are key priorities for multi-location brands, users, and the U.S. government. On January 1, the California Privacy Rights Act was put into effect, a solid sign that federal privacy laws may be in the near future in the U.S. In fact, a recent McKinsey report explored the topic of “Digital Trust” and how consumers will be factoring in their perceptions of data usage safety into purchasing decisions. A key finding was that consumers would be more likely to purchase from brands they feel have a proactive stance on keeping their data secure.
According to the research done by McKinsey, organizations best set up to create and maintain digital trust are the same organizations that are more likely to see annual growth rates of at least 10 percent. However, only a few of these companies are projected to deliver on this sense of protection.
While 70% of McKinsey’s consumer respondents believe that companies they do business with protect their data, 57% of executives surveyed reported that their organization had suffered from at least one data breach in the last three years. Given a figure like this, it is no surprise that consumer respondents rate an organization’s ethical reputation and amount of personal data required as almost equally as important as more traditional tenets such as quality, cost, or customer service when it comes to purchase-making decisions.
The next big change multi-location brands must embark on is making sure that consumer data is reliably protected and secure, as this is becoming a larger factor in buying decisions. In fact, McKinsey also reported 53% of consumers are only making online purchases or engaging in a digital service after checking a company’s reputation for digital trust. Notably, this figure rises amongst certain key demographic groups, such as Latin and South American (70%) and Gen Z respondents (58%).
With sentiments in mind like those collected by McKinsey, it is difficult for brands to continue to ignore what consumers are asking of them – providing more authenticity and proactivity when it comes to personal data protection.
Lessons Learned From Other Industries
To ensure consumers that data privacy is of the utmost importance to a company’s bottom line, multi-location brands can look to other industries – such as the highly controlled healthcare field – for best practices on how to do so.
About 30% of the world’s data today comes from the healthcare industry, and this number is only expected to grow in the next few years. Therefore, healthcare organizations (both public and private) are tasked by HIPAA regulations to take extra precautions when securely protecting the integrity, confidentiality, and availability of its vast amounts of sensitive patient data. The individuals that maintain the security of this data all while in the midst of ever-changing privacy compliance regulations are great resources when it comes to doing so.
For example, any inconsistencies between data and marketing campaigns can interfere with the greater organization’s ability to produce actionable insights for the brand. While this can happen to an organization in any sector, it is especially crucial within the heavily-regulated healthcare space to ensure that these instances of potential exposure are nonexistent.
The implementation of a high-quality data governance system has helped organizations in the healthcare industry to increase organization, security, and knowledge of how to successfully apply data. Data built with the same blueprint means faster handoffs, quick decisions, and improved customer experiences. The goal is to have a solution that will standardize, automate, and govern data across their disjointed teams, which has been found to reduce the amount of unspecified and misclassified data for multinational healthcare companies. Once a central system is in place, reassurance for consumers and brands alike is not far behind.
In today’s climate, privacy needs to be at the forefront both internally and externally. Growing compliance requirements from the government and regulatory authorities, as well as risks of a data breach, could be the difference between a happy consumer and a potential lawsuit.
By embracing privacy-by-design – an ideology whose concepts have been included in data protection regulations across the globe – is to include functionality and options that allow customers to configure many privacy-related controls, such as securing personally identifiable information.
A primary goal of privacy-by-design is to make sure privacy is not an afterthought. By implementing the correct measures into an organization’s infrastructure early on, teams can avoid unnecessary compromises down the line. Speaking proactively and transparently with internal teams, as well as consumers, about the importance of protecting personal data will make for a more secure, aware, and reliable organization.
While the privacy-by-design framework is mainly known for keeping consumer information private, another aspect is providing users with a choice. Requiring consent from the individual before any data processing activities occur shows that privacy is a proactive setting for the company that is considered seriously and openly. Accessible and comprehensive policies and procedures are the best way to demonstrate visibility and transparency, therefore earning consumer trust.
As brands continue to consider what needs to change in order to optimize results, candor about the gravity of consumer privacy should be close to the top of the list. It is becoming more important to audiences, with some demographics placing more emphasis than others, that the companies they do business with are mindful and assertive when it comes to keeping data confidential. Living up to consumer standards is possible, as other industries have proven. It is just a matter of using the right tactics and being honest and open. With these new best practices, multi-location brands can begin to really make digital trust a priority.