Consumers insist control over use of their personal information

Empower consumers with maximal control over the gathering and use of their personal and behavioural information and retailers will be able to create mutually beneficial relationships, says Christie Koorts, University of Stellenbosch Business School’s (USB) top MBA student of 2014 in his research on consumer sensitivity regarding the use of personal information in relationship marketing.

Koorts says in a modern era where businesses aim to gather as much knowledge about consumers’ lifestyles, preferences and buying behaviour as possible, retailers would be wise to consider the paradoxical dilemma of gathering such information for the purposes of generating customer loyalty.

“Consumers’ personal information offers retailers a competitive advantage in providing them with insight into consumer preferences, needs and attitudes however, the degree to which consumers are comfortable with the gathering and use of such personal information is critically important as these views and sentiments may aid or harm retailers’ efforts in establishing and nurturing consumer relationships.  What consumers think and feel about the use of their personal information has become far more important than legal compliance alone.”

Koorts’ research sample of 30 Millennials aged 20 to 23, representing a young, educated, digitally savvy and increasingly influential generation of consumers, indicated a 83% willingness to share their personal information, but with clear expectations, preferences and dislikes.

“Participants singled out telemarketing as an annoying and intrusive barrier to relationship trust and much preferred face-to-face and digital communication.  Consumers’ personal information should never be shared with third parties, since the exchange of personal information takes place on the basis of relationship trust in the first instance, which would be eroded if information is shared outside of these boundaries.”

Although 67% of participants recognised the advantages and benefits of sharing their information, retailers need to understand consumers’ expectations when doing so. “Personalised marketing and products, shopping convenience, better promotions and discounts and an excellent customer experience, were some of the expectations shared.”

Koorts says that retailers too need to realise that the gathering of such consumer insights comes with associated legal, ethical and reputational risks and that they are measured by public opinion as to their trustworthy conduct when gathering and managing personal information, even when done within the boundaries of the law.

“Participants considered the gathering of information without consent or through questionable methods as unethical, specifically noting the practice of small print terms and conditions often used when gathering information, which is seen as an insincere gesture, as this is generally not read and understood.”

“Consumers want choice and effective control over who engages them, the ways in which they are engaged, and to which ends their personal information is used. Strong views from participants suggested that retailers’ tactics infringed on consumers’ ability to exercise free choice, as retailers decided what to market to them and in doing so influenced consumer buying patterns based on personal insight.”

Koorts’ findings indicate that retailers need to build relationships of trust through the empowerment of consumers towards a win-win scenario for retailers and consumers alike.  “Once consumers’ personal information has been gathered it is important to follow through with relevant personalised marketing and customer experience initiatives aligned to consumers’ expectations.  If sensitive information will not be used to benefit the consumer, it is best not to gather such information at all.”

Source: University of Stellenbosch Business School

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