Crowd in the mall showing consumer privacy and concern with data practices

Yes, Consumers Care About Privacy; And They Vote With Their Wallets

Are business growth and respect for people’s data dignity mutually exclusive? Do consumers care about the privacy protections afforded to them by regulations? Do they even pay attention to cookie banners at the bottom of a website, or do they just swat them away? These are questions that Chief Privacy Officers are being asked as they build budgets and collaborate with other business leaders on privacy initiatives.

CPOs know the vital importance of privacy to the business. They also know that privacy is a team sport, one in which they must work with their peers in IT, marketing, and data. It’s about collaboration, but also about resources – privacy budgets can be thin, but with the right motivators, can be bolstered by IT or marketing budgets.

Ensuring growth from data is one important motivator, especially for marketing and data teams. Consumer perceptions are another, and the two are closely linked. How consumers feel about data privacy and whether they trust companies that treat their data responsibly will affect brand value and other important business metrics. MAGNA Media Trials set out to quantify that value in the study The Person Behind the Data (US edition): People weigh in on how companies handle their data (see here the UK edition).

Specifically, MAGNA surveyed over 5,000 U.S. and UK consumers across all ages, genders and ethnicities. Additionally, they conducted focus groups to ask in-depth questions about their attitudes. The purpose of the study was twofold. First, researchers wanted to understand how everyday consumers feel about privacy, and how companies collect and use their data. Second, they wanted to understand the impact of responsible data practices on a company’s bottom line.

The responses point to a consumer base that is extremely aware and highly sensitive about privacy issues, and quick to abandon brands that misuse their data.

The activist consumer is on the rise, favoring brands that share their values and boycotting ones that don’t. Sustainability and social fairness are commonly pursued as shared values, with examples like Patagonia at the vanguard. Less known is the impact of data privacy on brand value, but companies like Apple are already reaping the benefits. In the MAGNA study, more consumers ‘highly valued’ data privacy compared to other issues such as sustainability and diversity & inclusion. What’s more, the concern for privacy cuts across all ages, genders and ethnicities.

Another interesting highlight is how astute consumers are in terms of engaging with brands; 83% say they understand the value of sharing data, such as when they want to learn about new products. The currency for the value exchange is data, and while consumers understand this bargain, it’s clear they don’t want to be overcharged.

Put another way, more consumers are demanding their data dignity. As one focus group participant put it, “it’s time to reclaim our power, and to say that we own this data.”

Businesses are wise to heed this concern, as 82% of respondents expressed concern over how their data is being gathered and used. Despite the cookie banners (and the cryptic explanations for how data is used), more than half of respondents say there’s no transparency into data practices, and 64% say they believe that they have no control. They also question why brands ask for data that seems unnecessary to the value exchange, and would like to see data collection cut down to the minimum requirement for selecting and delivering products and services.

The Bottom Line

A brand’s data policies have huge impacts on trust, brand preference and revenue growth. Responsible data practices are table stakes for today’s shoppers, and they have concrete ideas of what those practices should encompass – collect and retain only the data you actually need, only share data with permission, and be wholly transparent on how data will be used.

Consumers will reward brands that have responsible data practices with 23% more purchase intent – and CPOs are leveraging results like these to collaborate across their organization, driving business and #privacy program results. #respectdataClick to Tweet

Consumers will reward brands that have responsible data practices with “23% more purchase intent” – and CPOs are leveraging results like these to collaborate across their organization, driving business and privacy program results.