By Daniel Hunter

New research from customer insight provider Transactis shows that responsible and effective use of consumers’ data remains a key to not only winning their trust and loyalty, but ensuring that they respect a brand and its procedures — especially when it comes acting honestly if they receive an item by mistake.

The findings of the report, entitled The Two Sides of Consumer Trust, demonstrate that employing personal data to better understand individual consumer behaviour can provide a competitive advantage to a business while failure to do so can result in customer abuses and additional costs.

Overall, the research — based on a survey of more than 1,000 UK consumers — reveals that across a range of sectors consumers show greater respect for a company’s processes and are more likely to take action in situations that require their cooperation if a firm has demonstrated secure and efficient use of personal data. The study, part of a series on consumer trust produced by Transactis over the last three years, is representative of the UK by age, gender, region, and social class.

The research establishes that good data practice engenders positive behaviour: 70% of consumers say that if a company is usually ‘on the ball’ — making intelligent use of data to ascertain their preferences and strengthen its relationship with them — on the rare occasion it makes a mistake, they would be unlikely to take advantage.

On the other hand, where an organisation appears to be failing to use customer data to track their needs, behaviour, entitlements and experience, consumers are more likely to take advantage of undeserved windfalls and opportunities:

· 49% would keep an extra item if a retailer delivered two instead of one;
· 61% would use a discount voucher they were not actually entitled to;
· 64% would keep a loyalty reward bonus they had not earned;
· 63% would take a mobile upgrade they were not actually eligible for;
· 72% would keep quiet about TV channels they had not subscribed to;
· 48% would keep an excessive insurance pay-out.

Organisations most likely to be taken advantage of by consumers are big brands and supermarkets. People are more reluctant to capitalise on errors by government organisations and charities, but a small proportion still would take advantage if given the chance:

· 17% would not return a wrongly awarded state benefit;
· 25% would retain a tax credit they received by mistake;
· 14% would keep a charity gift sent in error.

The report also demonstrates that secure and efficient use of consumer data provides a springboard for expanding existing customer relationships, with roughly 63% of respondents saying they would spend more money with a company that uses their data to create relevant offers and good service and 59% saying they would buy more regularly from that brand.

Effective data usage builds trust and loyalty amongst consumers, and creates unique selling opportunities, especially if it is used to get the timing right on offers — 62% of respondents tend not to shop around if a brand they trust sends them a fair offer at the right time.

Consumers take a hard line on data wastage — the failure by a company to use the personal information it holds on a consumer to inform communications and other interactions with that individual. When a company sends irrelevant communications that fail to recognise previous purchases, 61% are likely to stop buying from that firm in the future.

John Sharman, Transactis’ commercial director, comments: “This research demonstrates clearly that taking care of a customer’s data and using it to better communicate and serve consumer needs both builds trust in a brand and makes it easier for the company to trust the customer. Failure to use data to more efficiently deal with customers not only fosters alienation and dissatisfaction, it actually opens the way to abuses by consumers who see organisations that are not tracking what is going on as careless and ineffective. As a result, they have few qualms about taking an opportunity to keep something they are not entitled to, thus generating hidden costs for the business.

“The survey also makes clear that using data to better tailor, time and target offers and create a more personalised customer experience helps brands to win trust and expand their relationships with consumers — paving the way for cross-selling and up-selling opportunities, as well as further sales. The findings also plainly show that firms that fail to make good use of personal data by sending out badly timed, inappropriate and poorly targeted messages and offers will suffer the consequences, as their customers turn to more efficient competitors.”

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