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Honesty in
Why customers
trust honesty

Author: Rose de Fremery

Customers are paying closer attention to how brands manage data privacy and data security, and they don't like what they see. According to recent research from Verizon, less than half of customers (48%) are comfortable sharing their data with businesses and almost two-thirds of them (64%) don't want the brands they interact with to obtain data about them from third parties—even when they would receive a more personalized experience in return.

Customers trust honesty and transparency in their relationships with brands, however, and they're more willing to share private data with businesses that demonstrate these values. Here's why honesty in business is essential to customer loyalty and how companies that are transparent about how they manage their customers' private data can earn that trust.

Customers are concerned about brands' data practices

The state of brand trust today, simply put, isn't ideal. Eighty-seven percent of the customers surveyed in Verizon's report voiced some concerns about how their personal data is gathered. Even customers that take a liberal approach to sharing data need reassurance about how brands use it. This might be because they've noticed a brand using third-party data without their express permission and felt uncomfortable as a result. It could also be because their personal information has already appeared in a data breach, putting them at potential risk for financial loss or identity theft—58% of liberal data sharers report having experienced such an incident within the past two years.

Despite their reservations, customers continue sharing data with brands. When asked why, 24% of those who express discomfort or ambivalence about sharing data say they have no choice. Another 22% say they value the personalized service or special offers they receive in return. Seventeen percent point out they don't have time to shop around for brands with strong data practices, while 21% are optimists who believe brands will eventually do a better job with their customers' personal information.

Overall, this is hardly a ringing endorsement of brands' data practices. Customers trust honesty, and they're increasingly wary of brands that aren't demonstrating it. 

Customers trust honesty: Honesty is key to a great CX and continued customer loyalty

Customers have concerns, but those worries can usually be alleviated if the brand demonstrates honesty and transparency. As it turns out, honesty in business is also essential to improving the customer experience and gaining a competitive edge. Although one might think it would be both natural and simple for brands to be honest and transparent with their customers, the reality is a bit more complicated.

Businesses have long been accustomed to using customers' third-party data without having to obtain their informed consent. This is especially true in the United States, where data privacy regulations aren't as strict as they are in other parts of the world. Accordingly, it will likely take companies some time to figure out how to operationalize trust and transparency with regard to both data management practices and customer communication.

Honesty in business: Four ways to improve honesty and transparency

Here are four steps your brand can take to improve honesty and transparency so that customers have more confidence when engaging with you:

1. Reconsider the use of third-party data

Even customers who are more inclined to share their personal information with companies have misgivings about third-party data. When it becomes evident to a customer that a brand has gathered their data from a third party without their informed consent, they may lose trust in the brand and the relationship might even be compromised. Accordingly, brands should reconsider whether using third-party data will actually help them achieve their customer experience goals.

2. Give the customer more control

Part of being transparent and honest involves giving customers more control over how their data is used. For example, consider allowing customers to opt in to certain data analytics. Or, if you use artificial intelligence (AI) in certain customer interactions, give them the option to interact with you in another way. When customers feel they're being forced into experiences they don't want, that causes frustration and erodes trust. When you intentionally create a customer-centric experience, however, the opposite happens—customers enjoy a better experience and customer trust increases.

3. Make it simple 

Customers trust honesty and want more control over their data, but they often feel there's too much effort involved in doing so. When it's difficult to exercise control, that friction influences their perception of their overall customer experience with you. It also raises doubts in their minds about whether your brand believes it's accountable to its customers and, accordingly, whether they can trust you with their personal information. Making the process easy for them will go a long way toward earning their trust.

4. Be fast, as well as honest

Customers trust honesty, but they also care about timeliness—especially when a data breach has taken place. Customers often appreciate when a brand is transparent in these cases. When they suspect the company is delaying notifying customers about a breach, however, they may begin to wonder whether it's practicing honesty in business. Prompt, open communication greatly increases your chances of restoring customers' trust in situations like these.

Earn your customers' trust and gain a competitive advantage

Many customers have lost trust in brands, and it's hard to blame them. More than a quarter of customers (28%) have had their data compromised, misused or shared without their consent by a company in the past two years. This is a challenge to be sure, but it's also an opportunity. Customers trust honesty, and they're open to sharing data with brands that show both honesty and transparency with customer data. By taking the steps to earn customers' trust, businesses can deliver a better customer experience and gain a competitive advantage in the market.

Learn how to build consumer confidence in data sharing and new technology.