With the
help of technology, companies today sweep up huge amounts of customer data. But
they tend to be opaque about the information they collect and often resell,
which leaves their customers feeling uneasy. Though that practice may give
firms an edge in the short term, in the long run it undermines consumers’
trust, which in turn hurts competitiveness, say authors Morey, Forbath, and
Schoop. In this article, the three share the results of a survey of 900 people
across five countries, which looked at attitudes about data privacy and
security. It examined what people knew about the information trails they leave
online, which organizations they did—and did not—trust with their data, and
which data they valued the most. The results show that the value consumers
place on different data depends a lot on what it is and how it is used. In
general, the perceived value rises as the data’s breadth and sensitivity
increases from basic, voluntarily shared information to detailed, predictive
profiles that firms create through analytics, and as its uses shift from
benefiting the consumer to benefiting the company. If data is used to improve a
product, consumers generally feel the enhancement itself is a fair trade, but
they expect more in return for data used to target marketing, and the most in
return for data sold to third parties. To build trust, companies must be
transparent about the data they gather and offer consumers appropriate value in
exchange for it. Simple legal disclosures aren’t enough, however; companies must
actively educate their customers and incorporate fairness into their products
and models from the start. Companies that get this will win consumers’ goodwill
and business and continued access to their data. Companies that don’t will find
themselves at a serious disadvantage, and maybe even shut out. [ABSTRACT FROM
AUTHOR]