The Gist
- Trust-driven marketing. Embracing data transparency builds consumer trust, leading to greater brand loyalty and longer customer relationships.
- Empower with consent. Giving customers control over their data preferences empowers them and aligns your brand with privacy-first values.
- Value-first data use. Leveraging data transparently for personalized experiences shows respect for consumer privacy while driving engagement.
With news of data breaches seemingly increasing by the day and consumer privacy concerns at an all-time high, brands are rethinking how they source, use and store customer data. Consumer trust is a delicate and valuable entity for brands. Earning it takes time, patience and consistency. Losing it can happen in an instant.
Consumers are holding brands to a higher standard, expecting transparency, respect and consent when it comes to their personal information. Today’s consumers are more data-aware, have higher standards and can easily switch brands if their expectations aren’t met. The challenge (and opportunity) for brands lies in building a long-term strategy that places trust — underpinned by data transparency and consent — at the core of marketing.
Evolving Privacy Concerns: Why Data Transparency Matters
The General Data Protection Regulation (GDPR) of the EU and the California Consumer Privacy Act (CCPA), enforced in 2018 and 2020, respectively, were created to protect individuals’ privacy rights in the digital age, where vast amounts of personal data are collected, managed and processed by companies. Both laws emerged as responses to growing concerns about how personal data is used, often without individuals’ knowledge or consent.
Brands responded accordingly with many proactively implementing their own privacy guidelines closely aligned or in accordance with these laws as a gesture of their commitment to keeping consumer data safe. But the dynamics at play go far beyond just regulatory compliance and tell a larger story about using trust to increase brand loyalty.
Trust is the foundation of modern marketing. By adhering to consent-based frameworks and being upfront about their data policies, brands can position themselves as advocates for privacy –– which may be a differentiating factor in a consumer’s choice to support that brand. According to a 2023 study by McKinsey, 71% of consumers are more likely to buy from brands they believe are transparent and responsible in their use of data. Further, Cisco’s 2023 Data Privacy Benchmark Study found 92% of consumers believe that businesses must do more to protect their privacy, while 61% have abandoned an organization because of its data practices.
Consumers Want Data Transparency, and Marketers Should Listen
The acceleration of digital transformation over the past decade has fundamentally changed how companies interact with consumers. With every app download, website visit and ecommerce transaction, personal data is exchanged like currency. According to a recent survey by Blis, nearly a third of Americans (31%) are unwilling to give their email or phone number to access a publisher’s website, and an additional 38% may share their data but feel that being required to do so is invasive. For marketers, the message is clear: Reliance on outdated methods of tracking and targeting will no longer suffice.
Maintaining effective targeting and customer data collection while prioritizing user privacy has become essential. In response to this, marketers have begun to shift their strategies. Contextual advertising is one such adaptation. With this approach, marketers target ads based on the content that a consumer is viewing, rather than tracking their activity across multiple touchpoints. Most importantly, this method does not rely on cookies and preserves consumer privacy.
It’s a First-Party Data World
Although some consumers may be hesitant to provide personal information such as email addresses and phone numbers, without third-party cookies, first-party data has become even more valuable. By collecting zero-party and first-party data from consumers through site visits, newsletter opt-ins, surveys and customer loyalty programs, marketers are building strong, direct relationships with consumers.
As Google’s moves around third-party cookies continues to be fluid, first-party data is the gold standard as it offers businesses the ability to build detailed, actionable customer profiles without relying on external tracking, and it has consent already secured. Leveraging first-party data for personalized marketing increases customer lifetime value, where third-party can fall short.
Data transparency has evolved into a strategic imperative rather than a regulatory checkbox. Clear communication about data collection and its use can be a differentiator, allowing brands to engage customers on the basis of trust rather than mere compliance. When brands are open about their data use, it reinforces a feeling of shared values, which can drive deeper emotional connections. Data transparency, therefore, isn’t just a risk mitigator but a potential loyalty booster.
Related Article: The Role of Data Privacy in Customer Trust and Brand Loyalty
Empowering Consumers Through Consent
In the past, consent was often treated as an afterthought, or worse, as a perfunctory acknowledgement at the end of a form. The introduction of global privacy regulations has forced a reevaluation of this approach, but regulatory compliance alone is insufficient to meet consumer expectations. True consent is more than a formality; it’s an expression of respect and empowerment for the consumer.
To operationalize this, consent must be treated as an ongoing conversation, not a one-time transaction. Today’s top marketers are now giving customers more granular control over how their data is used. For example, they may allow users to opt into different types of data collection (e.g., analytics, advertising, personalization) rather than offering a blanket opt-in.
Similarly, forward-thinking companies are also adopting more user-friendly interfaces to handle consent management. These interfaces provide clear explanations of what data will be used for, offering consumers straightforward ways to change their preferences.
Related Article: Customer Trust: The Backbone of Digital Age
The Trust-Loyalty Flywheel: Providing Value in Exchange for Information
Consumers are increasingly open to sharing personal information, but only when there’s a clear value proposition (e.g., exclusive deals, tailored offers, next-level personalization, discounts). Marketing is a two-way street. When companies give consumers what they want, not just what they need, they can reap the benefits. However, this dynamic hinges on transparency and trust; consumers must perceive that the brand’s use of their data will enhance their experience. This value exchange drives long-term growth and retention for brands that prioritize customer-centric strategies.
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5 Ways to Build Trust-First Strategies
- Move Beyond Compliance: Use data transparency and consent as differentiators. Proactively communicate your data practices in ways that are understandable and valuable to your customers, not just legally compliant.
- Simplify Data Use Explanations: Consumers don’t want to wade through legalese. Brands should explain in plain language what data is being collected, how it will be used and, most importantly, how it will benefit the customer.
- Offer Granular Consent: Give users the ability to control what types of data they share and how that data is used. Make it easy to adjust these settings over time, and ensure that the process is user-friendly and accessible.
- Audit and Update Consent Mechanisms Regularly: Treat consent as a dynamic process. Regularly check in with consumers to confirm their data preferences and update consent mechanisms to reflect changing privacy regulations and customer expectations.
- Leverage Trust as a Brand Differentiator: Promote your privacy initiatives and data transparency efforts in your marketing messages. Consumers are increasingly choosing brands that prioritize ethical data practices. Building a narrative around your respect for privacy can elevate your brand.
Ultimately, brands must move toward adopting a trust-first strategy — and soon. The future of marketing isn’t just about how well you know your customers; it’s about how much they trust you with what they share.
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