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How Do Customers Feel About Sharing Personal Data with Brands?

tags Loyalty Programs CRM & Analytics

Brands are collecting more personal customer data than ever before, with almost every transaction requiring customers to share at least an email address. What’s the real purpose of collecting customer data, and how do customers feel about it? We’re answering these questions so you can maintain positive customer relationships and leverage customer data like a pro.

Are Consumers Willing to Share Their Data?

In general, customers are becoming more willing to share data with brands, so long as there is a benefit to doing so. In fact, 77 percent of global consumers say they will share their email addresses if it means getting a more personalized experience! 

Here’s what customers are willing to share.

A survey of more than 9,000 global consumers found that consumers are most willing to share their:

  1. Email addresses
  2. Names
  3. Interests relevant to the brand
  4. Communication preferences (channel, topic, frequency)
  5. Browsing history on the brand’s website or app

Many consumers—particularly those in the US—are also comfortable sharing information like their postal address, mobile number, demographic information, and closest store location. 

Younger generations are more open.

Not all generations feel the same way about sharing data. In general, Generation X, millennials, and Generation Z are more eager to share data in exchange for personalization compared to older consumers, who may be a bit more wary about sharing their personal information.

There’s some confusion around data sharing.

Although consumers are willing to share their data, they are unclear about the what, how, and why of sharing their personal data with brands. Research shows that the majority of consumers only have a partial understanding of the types of personal data brands collect about them. Transparency around data collection and usage can help build trust. 

What Do Customers Expect in Exchange for Their Data?

One thing is clear: Customers don’t share their personal data without expecting something in return. Namely, customers want a personalized experience. 

Data can paint a picture of your customer base as a whole or specific segments of it, helping inform your product and service offerings, messaging, and more. In this way, by sharing their data, an individual customer can indirectly contribute to an improved experience with your brand. 

However, from consumers’ perspectives, the benefit should also be directly felt. That comes through personalized experiences that speak to the individual customer. For example, this might include personalized: 

  • Communications
  • Product recommendations
  • Discounts
  • Loyalty rewards

For instance, when a customer receives a text message letting them know a sweater they viewed online last week is now on sale, or when they get a coupon for a free birthday meal in their email inbox, they’re enjoying the personalized experience they want in exchange for sharing their data with your brand. 

How Can Brands Collect Customer Data? 

Brands can collect customer data in a number of ways. Some approaches include collecting data directly through website forms and customer surveys. You’ll want to provide an immediate incentive in these cases, such as a discount code or entry into a prize drawing.

You can also collect data through website and social media analytics. For instance, retailers can track customers’ browsing and searches on their e-commerce platform, cart status, and purchase history. Restaurants can use point-of-sale systems to track customers’ buying habits. 

Brands use their customer relationship management (CRM) platform as a customer information database to store, manage, and access customer data. If you’re like some brands, maybe you have the data, but it’s disorganized, and you aren’t sure how to leverage it for personalization. A CRM and analytics partner can help you unlock the potential of your customer data.

Why Does Consumer Data Privacy Matter?

No discussion of customer data is complete without some focus on privacy concerns. Failure to protect data can result in lost customers, reputational damage, and non-compliance penalties. McKinsey found that 87 percent of consumers would not do business with a company if they had concerns about the company’s security practices!

Protecting customer information databases is an ongoing challenge for brands. In the retail space, for example, ransomware attacks in 2022 increased 67 percent over 2021 and 233 percent over 2020. According to IBM, data breaches in retail cost an average of $3.28 million! In some industries, such as healthcare and financial services, data breaches can have even more dire consequences. 

These aren’t reasons to avoid collecting customer data. It just means you need to do so responsibly and implement robust security measures to protect that data. You also need to make sharing data (and the possible risks of doing so) worthwhile for consumers. If you deliver on—or exceed—their expectations for personalization and protect their data, you have a solid foundation for serious customer loyalty.

Start Making the Most of Customer Data With a Solid CRM Strategy!

A well-populated customer information database is a valuable asset, providing insight into customer behaviors, opportunities for targeted marketing, improved customer loyalty management, and business intelligence that improves decision-making. If you want to see how you’re doing with customer data, take a few minutes to complete our CRM & Analytics Checkup!

CRM & Analytics Checkup Assessment

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