A new analysis has confirmed what data professionals have been banging on about for years; good data practice is not only a competitive differentiator, it is a major revenue driver and has a measurable impact on customer acquisition and retention efforts.
According to the study, carried out by customer data platform specialist Zeotap, poor data can impact revenue through its potential to build or damage consumer trust.
Showing that the real cost of data privacy done poorly is as likely to be in lost purchases as it is in regulators’ fines, over half (57%) of consumers said that they would cut ties with a company who contacts them through a non-consented channel.
The report, titled “The Value Exchange: Unveiling the Commercial Impact of Customer Data Privacy”, surveyed 3,000 consumers across the UK, Germany and Spain on their attitudes towards sharing data with companies they interact with.
Ultimately, the aim was to understand how far those companies’ data privacy practices can either enhance or damage their ability to acquire and retain customers.
The resulting data shows consumers have developed an acute sensitivity towards data privacy, with three-fifths (60%) growing more conscious of the personal information they share with companies over the past year.
Despite the best efforts of regulations such as GDPR, only two-fifths (40%) of consumers feel in control over how their personal information is used by the companies they interact with.
The impact of this rising level of sensitivity delivers both a warning and a call-to-arms for companies who handle customer data, as consumers showed that their impression of a company’s data privacy practices directly informs whether or not they choose to spend with them.
More than three-fifths (62%) of consumers are more willing to buy from brands who guarantee that their personal information won’t be shared with third parties – and a similar proportion (58%) would be more likely to recommend that company to friends and family.
However, mistakes mean lost revenue. When consumers were asked what they would do if they were contacted through a channel where they did not provide consent, 57% agreed that they would cut ties with that company altogether.
The report builds on learnings from Zeotap’s “Data Secrets of Successful Marketers” whitepaper published in late 2021, which showed that while 91% of marketers are confident in their approach to data privacy, many (30%) lacked the single view of customer consent that’s critical to safeguarding consumer preferences.
Zeotap believes the lack of consumer confidence shown in this report appears to support the hypothesis that many businesses still have far to go in earning the trust of their customers when it comes to data privacy.
Zeotap founder and CPO Projjol Banerjea said: “Data privacy is now much more than a statutory issue of compliance; it’s a question of brand reputation, differentiation, and, by extension, revenue.
“For anyone less inclined to take data privacy seriously because the threat of monetary penalties has yet to materialise for them, this should serve as a wake-up call: the real loss is top line – customers who take their business elsewhere.”
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