FOR IMMEDIATE RELEASE
HOW CAN COMPANIES ACQUIRE CUSTOMER DATA WHILE BUILDING CUSTOMER LOYALTY AT THE SAME TIME? ASK PERMISSION.
According to a new Bain & Company survey, more than half of consumers will share personal data willingly if asked and data use and protections are defined
New York – May 11, 2015 – New research from Bain & Company finds that customers' trust cannot be bought by companies offering compensation in exchange for selling or sharing personal data. Instead, the only viable approach is to ask consumers in a clear, straightforward way. Bain surveyed more than 900 U.S. consumers and found that 91 percent of respondents do not want companies selling their data, even if they are compensated for it. People opposed to having their data used or shared—even when asked—are rarely swayed by offers of monetary compensation. Moreover, the reluctance to trade their data for monetary compensation applies to all customers, no matter how active or sophisticated they are online.
Bain's survey reveals that about 80 percent of respondents know their data is being used in one way or another and has become a type of ‘currency' for companies seeking to better attract and retain customers. Yet they are often uncomfortable with how their data is used and shared. A full two-thirds feel that it should be illegal for companies to collect or use such data without getting prior consent.
Eric Almquist, a Bain partner in the firm's Customer Strategy & Marketing and Retail practices, said that in designing the survey, he and others expected to see that demographic characteristics such as age, income and education would play a big role in attitudes toward sharing data. They also expected more active or sophisticated online users to have different attitudes than laggards. "In fact," Almquist said, "the survey showed little variation in attitudes due to demographics or online sophistication."
Instead, consumer opinions vary according to the industry or sectors that could be using their data. Nearly 70 percent of respondents want to prevent any level of government or any financial institution from sharing their data. Only 43 percent have the same concerns with retailers and airlines. Utilities, search engines and communications providers land in the middle. The industry differences partly reflect longstanding loyalty programs in retail and travel, as well as the nature of the data that different types of companies collect and store.
Consumers are most willing to share user-contributed social data, such as product reviews; for that data, 44 percent said it is fine to share without their explicit permission. But fewer than 20 percent want their purchase behavior or demographic data shared without permission, while hardly anyone wants to see family/friend networks or financial or health information shared.
As a result, strategies to obtain customer permission for using data should vary by industry and the type of information being requested, said Rasmus Wegener, founder of Bain's Advanced Analytics Practice. "But open and transparent communication is a good place for any company to start," he said.
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About Bain & Company
Bain & Company is a global consultancy that helps the world’s most ambitious change makers define the future.
Across 63 offices in 38 countries, we work alongside our clients as one team with a shared ambition to achieve extraordinary results, outperform the competition, and redefine industries. We complement our tailored, integrated expertise with a vibrant ecosystem of digital innovators to deliver better, faster, and more enduring outcomes. Our 10-year commitment to invest more than $1 billion in pro bono services brings our talent, expertise, and insight to organizations tackling today’s urgent challenges in education, racial equity, social justice, economic development, and the environment. We earned a gold rating from EcoVadis, the leading platform for environmental, social, and ethical performance ratings for global supply chains, putting us in the top 2% of all companies. Since our founding in 1973, we have measured our success by the success of our clients, and we proudly maintain the highest level of client advocacy in the industry.