Retailers rely on data collection to improve relationships with their customers, provide a better experience, and remain competitive in the marketplace. But data collection is a sensitive topic that can send consumers packing. Transparency – done correctly – is the key to successful customer data collection. When you aren’t upfront about data collection, you risk alienating your customer base. Just how important is transparency and how can you embrace it effectively?
Case Study: E-ZPass Outrages Users
In 2013, an anonymous New York man discover that through the E-ZPass he had purchased to automatically pay toll booths, his vehicle was, in fact, being tracked all around the city. He presented his findings at the Defcon hacking conference, calling the tracking “intrusive and unsettling”. His story sparked instant outrage from E-ZPass customers.
As it turns out, the data is collected by the New York Department of Transportation for an initiative called Midtown in Motion to provide real-time traffic reports. While no personally identifiable information was used outside of toll booths, E-ZPass failed to disclose the full breadth of the data collection to its customers.
If E-ZPass had let its customers know that data could be used to help improve traffic patterns, those users might not have been so upset – they may even have been happy to contribute to reducing congestion in their city. Transparency: it’s the missing factor here that could have prevented the entire scandal.
Transparency Breeds Trust
To build trust and encourage customers to participate in data collection, transparency is of the utmost importance. Retailers should only continue their data collection initiatives if customers understand, agree to, and accept a store’s data collection practices.
People will trust a retailer who doesn’t hide behind long disclosures and technical language. They will be open to communicating with stores that tell them precisely why they want information and how sharing data will create a better shopping experience. Hiding data collection can – and usually will – lead to a customer mutiny.
What Does Transparency Look Like?
A transparent approach to big data collection includes these elements:
- The WHAT: Communicate clearly just what types of information you are collecting from your customers.
- The HOW: The average customer doesn’t understand the technical side of big data. To ensure clarity, describe your collection methods so that even a grade-schooler could understand.
- The WHY: Thanks to the media, some customers assume you want their information for nefarious purposes or to bombard them with junk mail or spam. Explain how sharing their information provides value.
- The WHEN: Lots of app users don’t know that location services can be deployed on their mobile device to track them even if their app is offline. They may assume that the app only tracks what they do while it is in use. Be honest about when you’re collecting their information.
- The WHAT IF: Data hacks make for great headlines, and set the stage for backlash. Clearly outline for your customers the steps you take to keep their information secure.
- The WHO: Are you the only ones looking at their data? Or do you share it with others? Be clear and open about who has access.
- The BENEFITS: This is the most important step in the transparency process, and it’s often the most ignored. Customers have consistently shown that they’re willing to give retailers information about themselves if they receive something beneficial in return. Be clear about the benefits they receive by opting in.
Last but not least, you need to give your customers an “emergency exit” from the system. Make opting out of data collection as easy as possible. Include a link in all of your emails and texts, and make it easy to find on your website and mobile app. Showing customers the virtual exits demonstrates that you value their personal preferences and helps them feel safer about sharing their information with you.
Navigating data collection is still rather new territory for many retailers, but it is important to remember that your customers know even less about the process. For most people, all they know are the headlines they read and the horror stories they hear. If you want your customers to understand what you’re trying to do for them, you’ve got to open the doors, let in the light, and embrace transparency.