With the ongoing threat of data breaches, hacks and scams, companies must work even harder to secure their business operations. A critical piece of this is protecting customer data. While this is important for all companies, it is especially so for merchants that require consumers to hand over large amounts of personal data to facilitate the most optimal customer experience.
Some consumers are skeptical about how their data is used and stored. From their perspective, they need to trust that their information is safe and secure. Building this trust is foundational to creating strong customer loyalty. But loyalty can also be fleeting, since the simplest of mistakes can undo the goodwill that merchants engender in their customer bases. The 451 Alliance’s Q2 2021 connected customer survey looked at some aspects of consumer sentiment toward merchant trust and loyalty.
In the survey, we asked respondents about the degree to which certain factors would influence their loyalty on a scale of 1-10 (8-10 – strong influence). Unsurprisingly, the best ways merchants can engender trust is by notifying customers when an event may impact the privacy or security of their data (56% strongly influenced) and offering control over personal preferences for data privacy (54%). Additionally, merchants could be more transparent in how customer data is used (52%) or offer the ability to opt in or opt out of features like cookies and location tracking (51%).
How Fraud Impacts the Digital Customer Experience
In fact, in another question, 45% of respondents indicated they strongly agree they trust companies that allow them to opt out of cookie tracking. Similarly, 36% of respondents indicate they would be less likely to shop with a merchant that did not offer the choice to opt out.
Almost half (44%) of respondents indicated they are not very comfortable or not at all comfortable with companies using personal data to craft personalized communications, ads or interactions. Yet, for those who are comfortable receiving personalized interactions, they are willing to receive cash or store credit (30%), discounts or exclusive promotions (30%) or gift cards (26%) in exchange for merchants using their personal data.
Trust and loyalty are not absolutes, nor are they permanent. Transgressions that would most quickly break the trust of customers are selling personal data without consent (56%), not taking appropriate measure to secure data (51%) and abusing contact information (49%).
All these scenarios have real-world impacts on merchants. Respondents were asked what caused them to abandon an online shopping cart over the last six months. The top pain points were being forced to register for an account (24%), requiring too much personal information (20%), and concerns about data security while shopping (19%). Additionally, having difficulty logging into an existing account (18%) and being asked to access data from other apps (18%) also bothered some shoppers.
As we’ve mentioned in previous reports and articles, these instances speak directly to some of the perceived mistrust that already exists on the part of consumers. The unnecessary friction in these shopping experiences represents millions of dollars in lost revenue. And not just in these specific cases, but in all the future transactions these customers may never make with these businesses.
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