Data privacy differentiates brands

28 March 2014
LONDON: Data privacy has become a "critical brand differentiator" for businesses looking to acquire new customers, with consumers' decision to share information driven by the use of trusted channels and transparency, new research has claimed.

The Customer Acquisition Barometer report, produced by the Direct Marketing Association in partnership with lead generation business McDowall, surveyed 1,509 UK consumers and interviewed 116 senior marketers to create the first annual benchmark of trends and issues brands face in acquiring new customers.

More than four in five consumers (85%) said they now only shared their information if it was made clear that it would be used only by the company collecting it; 32% expected a clearly worded privacy policy before they would share.

At the same time, however, nearly 80% of consumers questioned admitted they never read privacy policies or only sometimes looked at them.

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

Consumers had most confidence in email and brands' own websites as ways of providing their personal information, cited by 43% and 42% respectively as the most trustworthy channels.

Few did so via social media, however, despite the efforts of marketers. More than three quarters (77%) of marketers questioned used social media to acquire customers but only 16% thought it their most effective channel.

Among consumers, however, a mere 9% said they had given out their purchasing intentions via social media, although this rose to 20% of 18 to 24-year-olds. Fully 54% rated social media as the least trusted channel for sharing their information.

Chris Combemale, executive director of the DMA, argued that marketers had to adapt, and quickly, 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," he said.

"The most successful companies are respecting their customer's attitudes to privacy and making trust a critical brand differentiator," he added.

Data sourced from DMA; additional content by Warc staff
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