Companies would be wrong to assume that data privacy is an issue the public are unaware of or uninterested in. The research reveals many customers would take serious action in the event of a significant personal data breach, with up to 55% at risk of walking away from their bank, energy company or TV, phone or internet provider. As many as 30% of affected customers would ‘switch provider immediately’ and a further 25% would ‘wait to see a media response or what others say and do’ before switching.
The findings also show that customers are likely to care more and do more about their data privacy in future. Under GDPR, individuals will have the right to find out whether or not personal data concerning them is being processed, where and for what purpose. Companies will be obliged to return a free electronic copy of the individual’s personal data within thirty days, a service up to 70% of customers say they are likely to take advantage of. No company knows exactly how many customers will submit such a request, but firms with millions of customers are likely to face serious operational challenges.
Daniel Golding, Director at Baringa Partners, comments: “It’s easy to assume that customers largely ignore issues like data privacy. But even if you believe that people don’t truly consider something until it happens to them – a data breach, for example – the perils of treating customers as indifferent are made clear by our research. Given the expected rise in data breaches under GDPR, the potential threat to customer retention highlights the choices companies need to make now for the sake of their business.
“Preventing the loss of confidential data is paramount. Preparing to act in the event of a breach is also critical. However, soon companies will no longer have the option of communicating with customers only when things go wrong. Consumer behaviour is changing and companies will not only have to respond quickly and fully to customer queries about how their data is stored and used, they will need to be in a position to engage them in all sorts of other conversations.”
To earn a reputation for good data privacy management, companies must go beyond hygiene factors. Those that strive to better understand their customers’ fears and needs, and actively communicate the mutual benefits of data sharing, will discover opportunities to gain a competitive edge over their peers.
Companies are currently some way off this reality. The majority of customers (67%) do not want to share additional data about themselves with their existing providers, and even fewer would be happy for this information to be shared with third parties (74%). However, the main reason people would be happy to do so is to ‘get cheaper products or services’ (18%), demonstrating that where there is tangible value in it, customers are more open to sharing their data.
Daniel Golding adds: “Ultimately, companies should strive to be in a position where customers actively share additional information with them because they are trusted to use it well. Get there and a whole world of opportunity opens up, in creating truly bespoke products and services, anticipating and responding to changes in behaviour and trends, and rewarding and retaining customers. GDPR can set a new path for growth.”
