Protecting Privacy is Rewarded with Loyalty

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Jul 06, 2004
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By John Hennessy

A study conducted by the Poneman Institute and the nonprofit TRUSTe organization uncovered the importance of trust among customers.

“This survey shows that companies that make privacy a core value are rewarded by consumers with brand loyalty,” said Fran Maier, president and executive director of TRUSTe.

Dr. Larry Poneman, founder and chairman of the Poneman Institute added, “Because consumers are becoming more concerned about identify theft and the safeguarding of their personal assets, a low privacy trust score could provide companies with an early warning signal that their reputation and loyalty might be in jeopardy.”

In the study, which polled 6300 consumers, the top three criteria used by online shoppers to gauge a company’s trustworthiness are:

  • The company’s overall reputation for product and service quality, followed by;
  • A company’s limits on collection of its customers’ personal information, and;
  • The use of advertisements and solicitations that respect consumer privacy.

The last finding is further supported by over 58 percent of consumers receiving unwanted e-mail. That’s nearly double compared to last year.

Several of the companies who earned top trust rankings commented on the importance of privacy in establishing a trusting relationship with their customers.

“We are thrilled with the results of this independent survey, because obtaining and sustaining consumer trust is the basis for our Global Privacy Program,” said Sandra Hughes, global privacy executive, Procter & Gamble. “This trust enables P&G to learn from consumers and therefore provide superior products and services to improve their everyday lives.”

Moderator’s Comment: What are some great ways companies can make use of personal data while simultaneously respecting
shopper privacy?

Some of the companies at the top of the rankings, like eBay, Amazon and American Express, collect an enormous amount of personal data. They are also very
active in targeted marketing programs. So a conclusion to be drawn from this survey is not to run away from shopper data, but to respect it and use it on behalf of the customer.

An example is Amazon’s one-click purchasing. This program requires lots of sensitive, personal information, but it delivers shoppers the benefit of convenient,
rapid checkout.

How about self-scan one-click shopping? Register a card with the store, establish a means of validation and get that shopper out of the store more quickly.

Purchase data could be used to establish product preferences and filter through the hundreds of offers available to select the best dozen for each shopper.
That same preference information could be used to proactively notify select shoppers when Vidalia onions, or other seasonal or specialty items they enjoy are available at their
store.

John Hennessy – Moderator

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