BOSTON -- Big data has the potential to bump your revenues, market share and margins, but it requires using information that consumers are reluctant to share. Here's how to earn their trust.
Organizations that create trust regarding their use of such information should be able to increase the amount of consumer data they can access by at least five to 10 times in most countries, The Boston Consulting Group (BCG) estimated in a recent report, The Trust Advantage: How to Win with Big Data. This performance boost represents what the firm calls the "trust advantage."
"Unlocking value from big data has generated a great deal of buzz in the C-suite," John Rose, a senior partner and the report's lead author, said in a news release. "But often left out of the discussion is how to gain access to the information -- much of it sensitive personal data about real people -- in the first place."
Unless consumers trust a company with their personal data, most of the trillions of dollars of social and economic value promised from big data could remain untapped. The report estimates that two-thirds of the potential value could be lost if stakeholders fail to establish a trusted flow of personal data.
To help organizations develop strategies for earning trust in the age of big data, BCG surveyed nearly 10,000 consumers in 12 countries as part of its larger 2013 Global Consumer Sentiment Survey.
A company's starting point matters. Consumers are more than twice as concerned about the practices of financial institutions, social media and search-engines companies, and government entities than they are about those of branded manufacturers, carmakers, airlines and hotels, cable providers, and retailers that offer loyalty cards, according to the report.
Consumers want data privacy. For 75 percent of consumers in most countries, the privacy of personal data remains a top issue. Citizens of all the countries surveyed are most sensitive about credit card information, financial data, information about children, and health and genetic information.
Millennials are no less private online than other generations. In the U.S., for example, 71 percent of younger millennials, defined as people age 18-24, are cautious about sharing personal information online. While that's lower than for other generations, it's not remarkably lower.
Consumers will share data if they trust you. Only 7 percent of global consumers said they're willing to let their data be used beyond the purpose for which it was originally gathered, but 54 percent said they'd share personal information if they were sure it would remain confidential.
To gain the greatest access to consumer data, companies need to assure consumers that their data will be closely guarded, the report concluded. Trust remains elusive, however, as the public outcry over the National Security Agency's alleged misuse of data would indicate.
How to create trust
First, create principles, codes of conduct, compliance mechanisms and trust metrics to master data stewardship.
Next, engage consumers by communicating transparently, clearly and succinctly about how personal data will be safeguarded and used.
"Responsible data stewardship confers critical performance and brand advantages, as well as reduces risk," Christine Barton, a partner and report coauthor, said in the release. "Brands gain because they become perceived as being more transparent and more socially responsible, values that are increasingly important to global consumers and particularly the millennial generation."
A copy of the report can be downloaded at www.bcgperspectives.com.
The Boston Consulting Group contributed.
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