The data-privacy news of the last few weeks has once again highlighted one of the most obvious lessons in business. As Warren Buffett famously put it – “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
Customer attitudes to data privacy and protection are changing fast in both the business and consumer markets. The cliché, “data is the new oil” could well be gaining another meaning. The public grew aware of the environmental impact of the oil business and forced a change to how the resource is extracted and used. Similarly, data use and misuse is set to be a topic in people’s minds on par with how environmentally “green” a company is now, or how ethical their production and supply chains are.
Trust in a company handling data correctly is now a key consumer issue. We can see this in recent research from IBM. It found 75% of consumers globally (82% in the UK) will not buy a product from a company – no matter how great the products are – if they don’t trust it to protect their data. In addition, 73% think businesses are focused on profits over addressing consumers’ security needs – if we agree in the need to build trust, this figure shows us that many organisations are simply not doing enough to achieve this. Or to put it in Buffett’s terms, if companies think about that, they’ll do things differently.
Repeat after me – culture, culture, culture
A culture of responsible data use starts with the right tone at the very top. Leadership needs to ensure employees balance innovation with ethical and responsible data practices. Creating the right commitment to ethically sound data practices pays benefits not only in employee satisfaction but also in the creation of products and solutions that consumers can trust. As CEO of Trūata, a startup devoted to protecting data, ensuring we have a culture of ethical data has been a fundamental priority to my efforts in building my team.
>See also: Personal data and consumer trust: are companies doing enough?
Our organisation’s values, ethics and culture regarding responsible data use are foundational. Having an ethical and transparent approach to data collection, management and use requires, above all, a commitment within the company to handle citizen’s personal data with care. While technology is a key element, complementary processes and procedures regarding the handling and review of data are equally important.
Keeping the competitive edge
Establishing transparent data practices is an important element in gaining the consumers’ trust in so many businesses today. Data done right balances innovation with ethical data practices and places consumers at the centre of the product or service design process. This creates a partnership where there’s assurance from both sides that each is acting in each other’s best interests – whether it’s for creating new services, sculpting new business models or personalising existing offerings.
This requires ensuring your business processes and actions are understood by your target audience. Being open with customers about how their data will be used and for how long (including adherence to GDPR principles) is a great opportunity to let them buy in to your company and its culture and principles – not just your product . Again, it will come down to a business culture issue – if you are not treating data with respect and care, you cannot build real trust and expect loyalty from your customers.
>See also: GDPR: Respecting data is the new currency of trust
Simply put – if your business model revolves around attracting and keeping customers, and you deal with their data, you need to think about your approach to this challenge. Many see GDPR as a compliance issue, but the stakes are much higher than that.
The research from IBM and others is clearly showing this consumer preference for trust and an ethical approach to data is growing. Far from being a burden, the GDPR legislation is coming into force just at the right time to ensure truly ethical and responsible companies get the best chance possible to ride that particular market force.
Ensuring your services and the way you treat customer’s data is compliant with the letter and spirit of GDPR, and then being transparent about it, means you’re not only setting the company up for success in this new regulatory framework but also gaining customer support to help you to do so. There are plenty of opportunities out there to take a leap forward in your customers’ preferences, don’t let a view of GDPR as a compliance issue hold you back.
Sourced by Felix Marx, CEO of the new data trust Trūata.
