Customers’ Concerns About Data Security Could Keep Them From Buying From You

By Karen Axelton

How much personal information do you ask your customers to provide before they can buy from you, download information from your website or receive a newsletter or other information from you? For many consumers, it’s too much, according to a recent survey by LoyaltyOne reported in HubSpot.

And 85 percent say they “often” feel concerned about how much of their personal information companies have access to. There’s good reason for them to worry: Almost one in three consumers in the survey (32 percent) reported having had personal information stolen or compromised at one time or another.

In addition, consumers feel there often is no benefit to them in return for the risks they take by providing information to businesses. Some 88 percent believe that collecting personal information primarily benefits companies, not the consumer. Nearly three-fourths (74 percent) say they don’t receive a benefit in return for giving out their personal information. While companies often say collecting information is done to serve customers better, just 52 percent thought that sharing their information actually led to better service.

Just what do your customers expect to get in return for their personal information? More than half (55 percent) expect notice of exclusive offers, discounts or events, while 54 percent expect improved customer service. Forty-one percent expect advance notice about new products and services; the same number expect to get personalized communications based on their preferences.

Fears and concerns about privacy have serious ramifications for small businesses. Nearly one-fourth (23 percent) of consumers in the survey said they decided against making a purchase because they weren’t sure how a company would use their personal information.

And when their security is affected, customers are “once burned, twice shy.” Among those consumers who have been notified that their data has been compromised, the number who had decided against a purchase due to security worries rose to 30 percent; among those who had suffered negative results from data theft, it reached 37 percent.

What can you do to help make consumers more comfortable with your privacy policies? First, of course, make sure that the data you collect are secure by taking appropriate technology measures. Second, make consumers aware of your policies by clearly stating your privacy policy online. Third, ask for only the information you need—not more. Use your common sense–if someone is making a major purchase from you for the first time, get all the information you need to protect yourself from loss. However, if you’re having someone sign up for an enewsletter, their email address could be all you need. Be flexible, start small and get more data from the user as you build trust.

Image by Flickr user Mike (Creative Commons)

This entry was posted on Thursday, November 10th, 2011 at 6:00 am and is filed under Business Development, Marketing, Sales Process, sales process, Small Business, small business, Technology. You can follow any responses to this entry through the RSS 2.0 feed.


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