Data has become the currency of modern marketing. Zero-party data, which is freely given from customers, and first-party data, which is directly collected from customers, offer invaluable insights that can fuel personalized experiences and strengthen brand-customer relationships. However, with heightened privacy concerns, businesses should approach data usage responsibly. In this blog post, we will explore three fundamental principles that guide responsible data practices, backed by statistics from consumer surveys.
1. Visibility: Empowering Customers Through Clarity
The first principle involves providing customers with visibility into data exchanges. Transparency is crucial — a Vericast consumer privacy survey conducted in February 2023 revealed that 46% of consumers are concerned about their data being sold, while 21% worry about their behaviors being tracked. Lack of clarity is a driving force behind privacy concerns, as 39% of consumers feel powerless in controlling or informing how companies use their personal data.
To address this, companies should be explicit about the type of information they collect and the purpose for doing so. Customers should be aware of what they are trading their data for and how it will be used. Bear in mind that 23% of respondents admitted being unsure about the kinds of information companies collect overall.
By prioritizing transparency, businesses demonstrate respect for their customers privacy and build trust, which is an essential element of successful data-driven strategy.
2. Transparency: Building Trust Through Open Communication
The second principle centers on fostering open communication with customers regarding data usage. Salesforce’s State of the Connected Consumer Survey in February 2022 revealed that 79% of consumers are more likely to trust a company if its use of information is clearly explained. On the other end of the spectrum, 74% of consumers believe that companies collect more personal information than necessary, and 64% feel most companies are not transparent about how they use personal data.
To combat these perceptions, businesses should have easily accessible and understandable privacy policies that customers can comprehend without needing to be lawyers. Allow customers to change their data preferences easily, granting them control over their personal information.
Transparency goes beyond legal compliance; it is about establishing a trusting relationship with customers, where they feel confident that their data is handled responsibly.
3. Value: Making Data Exchange Meaningful
The final principle focuses on delivering meaningful value in exchange for customers’ data. Ethical data usage includes using it to enrich customer experiences, not merely collecting data for the sake of compiling it. According to the February Vericast consumer survey, if customers don’t see the value of sharing their data, 61% are unlikely to trust a company with their information.
Businesses should leverage zero and first-party data to create experiences that genuinely matter to customers. This could involve improving shopping or browsing experiences, offering personalized product recommendations, or providing valuable insights. When customers perceive value in the data exchange, they become more willing to share their information.
Zero and first-party data are powerful tools that can enhance marketing efforts and customer experiences. But with rising privacy concerns, businesses should prioritize responsible data usage. Customers want control over their data, clear explanations of data usage, and meaningful value in exchange for sharing their information. By adhering to the principles of visibility, transparency, and value, companies can build trust, respect their customers’ privacy, and establish meaningful relationships.
The goal is to strike the delicate balance between personalization and privacy, ensuring that customer trust remains intact while delivering exceptional experiences. Ultimately, responsible data practices are not only beneficial for customers but also critical for long-term business success.
Contact us to keep the conversation going or to learn more about how Vericast can help you make the most of your first-party data with the report, “Why First-Party Data Matters: Personalization, Privacy, and Growth.”