Data Privacy

Data privacy is now a “critical brand differentiator”, research reveals

Data privacy is now a “critical brand differentiator” for businesses looking to acquire new customers, with consumers’ decision to share information driven by the use of trusted channels and transparency, new research published today reveals.

According to the findings of the Customer Acquisition Barometer 2014, 43 per cent of consumers prefer email as their most trusted channels for sharing information, closely followed by 42 per cent who rated brands’ own website as their favoured route. More than four in five (85 per cent) now will only share their information if it’s made clear that it will be used only by the company that collects it; 32 per cent say they expect a clearly worded privacy policy before they share.

The findings follow remarks made by deputy Information Commissioner David Smith, who earlier this month told delegates at the DMA’s annual data summit that brands which make “a feature of [their] privacy approach” and are “getting in tune” with customers are to be admired.

The report also found that only one in two UK consumers (52%) claim to have willingly shared their personal information with a company in the past 12 months, in spite of marketers saying more than half of their budgets (59 per cent) is being dedicated to customer acquisition activities – compared to just 20 per cent on retention.

While email and brands’ website dominate in the trust stakes, social is failing to win consumers’ approval – despite marketers’ commitment to it. Four in five (77 per cent) of marketers said they use it for acquisition purposes, but only 16 per cent rate it as ‘effective’. This is perhaps because 54 per cent of consumers rate it as their least trusted channel for sharing their information.

The report, which was produced by DMA in partnership with McDowall, surveyed 1,509 UK consumers and interviewed 116 senior marketers as the first annual benchmark of current trends in and critical issues brands face in acquiring new customers.

According to Chris Combemale, executive director of the DMA, marketers must quickly adapt to the new expectations of consumers:

“Effective customer acquisition relies on trust and transparency which is undermined by some companies, organisations and institutions misusing, abusing and exploiting people’s information against their expectations and wishes.

“The most successful companies are respecting their customer’s attitudes to privacy and making trust a critical brand differentiator.”

The report also reveals that marketers are anticipating a shift in focus on their performance targets. Currently, 41 per cent report cost-per-acquisition as their primary measurement, compared to 37 per cent on quality of leads and 21 per cent on quantity of leads. However, over the next 12 months 35 per cent of marketers expect quantity of leads will rise to become their number one target.

Graham Bate, founder and chief executive of McDowall, said the Customer Acquisition Barometer 2014 highlighted for the first time the conflicting pressures facing marketers in their quest for new customers, but also revealed ways to reconcile these pressures.

“By probing both consumers and marketers about the way brands approach prospects, the Customer Acquisition Barometer is acting as a two-way mirror view on the most fundamental task marketers must execute,” Bate said.

“Consumers’ ambivalence about parting with their data, as well as the disconnect between marketer confidence in social media as a channel and consumer willingness to respond this way should sound alarm bells for marketers. The good news is that the Customer Acquisition Barometer – a qualitative as well as quantitative research exercise – provides signposts for overcoming these challenges.”

The report also includes insight from a focus group comprising senior marketers from brands including HP, Aviva, Avios and Wonga.

The inaugural Customer Acquisition Barometer 2014 is available for download from dma.org.uk/cab2014

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