When customers willingly hand over their data to you, it’s the ultimate sign of trust in your company and your intentions—a true reflection of the belief that you have their best interests at heart. No pressure, but that gives your business a lot to live up to. If customer data is important to your growing business’ success, it’s vital that you let customers know at every turn, in every way you can, that you fully understand that handing over their data is an act of trust, that you appreciate their faith in you, and that you will return their loyalty by being loyal in return. You’ve got to get the word out that you’ll treat their data like the valuable asset that it is: You won’t abuse it, and you’ll use it to deliver the best experience possible to them and to make that experience better all the time. And then keep that promise.
Do that, and you’ll win loyal customers for life.
And you know what? It’s not that hard to maintain a high level of customer trust if you believe in and follow a few simple principles. And if your business is a startup, this is a great opportunity for you to get it right at the very beginning. Here are three things you can do that will ensure customers feel good about sharing more and more data with you, which will enable both your customers and your business to benefit.
Be open and transparent.
The consulting firm Bain & Company recently conducted a survey of consumers in which they asked people about their willingness to share data. What stood out to me from the results was the observation that “simply asking for permission can more than double the number of consumers willing to share their data.” So it’s not about whether a company collects data about customers; it’s about whether a company collects data openly and transparently. When you see a media story about consumer outrage over data being collected or shared, the source of that outrage is almost always that it’s being done in a creepy or underhanded way that violates customer privacy.
I think this points to the importance of taking the principle of “radical openness” and applying it to the acts of collecting and using customer data. When you believe in your customer’s right to know what data you’re collecting and how you’re using it, and when you make that belief a fundamental principle for how you do business, you show the customer that you can be trusted to do the right thing when it comes to their data.
If that’s the case, I’d even argue that the consequences for a highly trusted company that violates that trust by misusing customer data would be far worse than the consequences for a less trustworthy company that does the same thing. The highly trusted company has more to lose, and so do the company’s customers, who may have parted with much more data (and much more sensitive data), simply because they believed the company would never betray them.
The lesson here is simple: Do everything you can to gain customers’ trust about data collection and sharing—and then do everything you can to keep from violating that trust.
The Harvard Business Review recently published a report on the results of a study that showed that the more trust consumers have in a brand, the more likely they are to share their data—because they trust so deeply that the data won’t be misused. This finding really raises the stakes if you’re a trusted company because it’s basically saying that the more trust you build, the more there is to lose if you violate it.
Reward customer trust generously.
If you want to get customers to trust you with more and more of their data, think about what you can do to make sure they’re receiving maximum value in return for sharing that data with you. A global consumer surveylast year by the research arm of the marketing and loyalty analytics company Aimia showed that more than half of participants were willing to share personal information with companies in exchange for relevant rewards.
The key there is “relevant.” What you do to reward customers needs to be grounded in what they value and desire, which can vary from industry to industry and country to country. For example, the Aimia survey showed that for customers of supermarkets or banks, getting cash bank was the most preferred way to be rewarded. But for airlines, it was getting loyalty points or discounts. Do your due diligence to get to know your customers and to understand what’s important to them, and act accordingly.
Of course, getting rewarded isn’t the only factor in motivating customers to share their data. The aforementioned Harvard Business Review report finds that if consumers find a company untrustworthy, no amount of inducement is likely to persuade them to share data with that company. And that leads back to the whole point of this post: When customers share data with you, it means they trust you. Treat that trust with care and conscientiousness, and it will benefit both you and your customer for a long time to come.
Originally posted in Forbes.com.