ADMA report warns marketers on perils of prying

Customers don’t trust businesses pushing personal information boundaries or selling it for financial benefit, according to a report published yesterday by the Association for Data-driven Marketing and Advertising.

The ADMA report reveals while consumers are willing to share personal information with businesses which demonstrate “good behaviour”, people don’t trust businesses asking for too much personal data.

The survey of more than 1600 Australians shows 77% won’t share personal details when asked for too much information, while 70% of people also won’t give information to companies found to breach data security.

ADMA chief executive Jodie Sangster says company behaviour trumps branding.

“You can have an amazing company brand or a well-recognised company brand, but that’s not going to be enough to convince us as consumers that you’re going to do the right thing with data,” she says.

Sangster says businesses must ensure customers understand how personal information will be used.

“It’s not that they’re uncomfortable with companies sharing data; it’s that they’re uncomfortable that they don’t know that data’s going to be shared or who it’s going to be shared with.”

“Gone are the days where you can just have a long privacy policy and hope that customers will read it and understand it,” she says.

Companies should also avoid collecting too much information, too soon.

“You don’t need everything up front straight away. As the relationship develops, the data will become richer.”

“Over time, have a strategy increasing the depth and the value of the data,” says Sangster.

Head of Marketing Angels, Michelle Gamble, says larger companies can learn from SMEs, who are less intrusive with marketing, relying instead on strong customer relationships and service.

“I think when you’re smaller you can be really authentic in your relationships with your customers. That’s what larger businesses have a lot more trouble replicating when it comes to communication with customers,” she says.

Consumers are most likely to trust government bodies and banks with personal data. But people trust mortgage providers, charities, online retailers, and entertainment companies and media outlets the least with personal details.

“Those types of companies have traditionally used data for a very specific purpose and not necessarily for costumer engagement.”

“So it’s a change of mindset that’s required for the companies that are less experienced in using data, to use it to create customer engagement, not just for specific business-focused purposes,” says Sangster.

This article first appeared on SmartCompany.