Did you know that customers consider trustworthiness and data protection to be as important as price and delivery times? Yet only half of customers trust brands to keep their sensitive information safe.
Without your customers’ trust, your business will struggle to grow a larger market share and increase your profit margin. After all, trusting customers stay, while distrustful customers take their business elsewhere.
In this blog, we’ll explain why data trust is so important for your customers — and for your business’s success, as a result. We’ll also demonstrate how you can increase trust to ensure better customer retention.
What do we mean by “data trust”?
Data trust refers to the confidence your employees, customers, and data subjects have in your data management processes. It ensures your data is useable, secure, and fit for its intended use.
When hearing this, your mind may immediately jump to data protection regulations such as the GDPR. This is understandable, especially when you consider how important data security is to your customers. Not to mention the regulatory fines your business may face if found non-compliant.
It’s of course important to keep your customers’ data safe. But this is only one factor of data trust. It’s also influenced by:
- Quality. This refers to the completeness and accuracy of your data. You need an acceptable, measured degree of both of these. Otherwise, you’ll suffer from low-quality data may contain duplications, errors, and inconsistencies, which can impact your customer outreach efforts as well as internal business intelligence tasks.
- Transparency. 85% of consumers want to know a company’s data privacy policies before purchasing. If you don’t make this information readily available, you can make customers feel uneasy.
- Processes. You can only achieve quality and transparency with sound data management practices and tools. This is a fundamental building block of data trust.
The impact of untrustworthy data on your customers
If your data is untrustworthy, your customers are more likely to suffer from:
Over a third of consumers globally have become victims of at least one data breach. 82% of these victims say breaches have had a negative impact on their lives.
If your data processes are non-compliant — or your employees aren’t well versed in data security best practices — you can put your customers at risk. In the wrong hands, breached data could result in financial losses, identity theft, and even blackmail. Not to mention, customers will have to spend time searching for new businesses to work with.
Over 70% of consumers say that poor personalization decreases their trust in brands, according to Adobe.
Personalization is now a common expectation. If your data is incomplete or inaccurate, you may end up frustrating your customers. For example, your customers might receive emails that aren’t addressed to them or recommendations for products they have never shown interest in. This will hinder your outreach efforts, reduce trust, and limit opportunities for further engagement.
Delays in receiving updates
Poor data management practices can lead to customers falling out of important internal processes or workflows. This can lead to them missing insightful company or product updates, as well as more specific user notifications such as updated user terms and conditions and shipping updates. This hampers their customer experience and may encourage them to look elsewhere.
If your data is untrustworthy, you may fail to meet your promised service-level agreements (SLA). For instance, imagine you’re delivering a product to a customer, such as a credit card. If you don’t have the correct order number and shipment details, you’ll be unable to update the customer on when they can expect to receive it. Now imagine the card gets lost during transit. Days later the customer complains. With no insight into where it is, you’ll impede the customer service experience further.
The consequences for your organization
Whatever impacts your customers will also have a direct impact on your business, too. A lack of data trust in your organization may result in:
Poor customer retention
A fifth of customers impacted by data breaches stop dealing with the affected companies. In other words: if you lose customer trust, you can lose your customers, period.
A rise in opt-outs
You may give your customers the option to contribute feedback data to help inform your product development efforts. You may also allow customers to opt-in to receiving usage reports. This can be useful for retaining customers and delivering services that align with their expectations.
However, if your customers don’t trust your data processes, they will be less likely to volunteer this valuable data. The result? You’ll have less information to improve your efforts.
Poor personalization or duplicated communications can hamper the effectiveness of your marketing campaigns. For example, you may suffer from lower email open rates, which can impact your lead nurturing strategy and overall return on investment.
How can you increase data trust?
Trust can take years to build but only a few seconds to break. In the case of data trust, one small crack in your customers’ confidence can result in lost business and lost revenue. That’s why it’s important to bolster your data management processes.
This starts with building a data culture amongst your technical and non-technical employees. With a culture that champions collaboration, quality, and compliance, you’ll limit the chance of bad data impacting your customers’ experience.
You can support these efforts with a comprehensive data integration platform such as CloverDX. By adopting a platform that provides complete visibility into your data pipelines, flags errors, and automates data validation, you can ensure your data is as trustworthy as possible. In turn, this will increase customer confidence and retention.