Why business is all about building trust

Manish Bahl | Updated on March 09, 2018 Published on September 09, 2016

Data policies Can make or break a business   -  asharkyu/shutterstock.com

In a digital world where fears of data misuse run high, transparent practices have become more important than ever

When we interact with companies such as Google, Netflix, Facebook, Amazon, Alibaba and others, it feels as if they already know us. It may be a recommendation on the outfit purchase you mulled over last week, or a reminder of things to do for the late-night flight you are readying to take.

At the heart of these experiences is personal data, generated by consumers’ online behaviours and actions. This collection of data is becoming increasingly valuable to companies, many of which are now scrambling to provide the highly personalised experiences that have caught the consumers’ fancy in recent years.

There is, however, a dark side to this business-technology shift; questions arise as to whether it’s appropriate for a health insurance provider to monitor clients’ fitness band data and use it to adjust their insurance premiums, or whether it’s appropriate for a pay-per-view movie provider to charge higher fees to customers living in a wealthy neighbourhood, as compared to those living in less affluent areas.

These questions are far too many to be answered individually; instead, we must frame them as ethics questions about how companies use consumers’ personal data and therefore earn the ultimate prize: consumer trust.

‘Return on trust’

According to Gartner, by 2018, half of business ethics violations will occur through improper use of big data analytics. In an age when personal data is the key to honing competitive edge, data ethics is at the heart of business success. A Cognizant study on the business value of trust shows that almost 70 per cent of Indian consumers surveyed are willing to pay a premium for products and services from companies they trust most. However, the reverse is equally true: Roughly 53 per cent will stop doing business with a company that has broken their trust. “Return on trust” emerges as the new digital economy imperative in India.

Among all the industries surveyed, the study shows that telecom operators are perceived least trustworthy for the use of consumers’ personal information in India, followed by automotive companies and retailers. The sense of losing control is the key concern among consumers as 73 per cent feel that they have a little control on the use of their personal data by companies.

As the digital revolution unfolds, trust will become even more important. The study indicates that transparency is the top factor upsetting a company’s trustworthiness — 50 per cent of Indian consumers surveyed are willing to share their personal data if a company asks upfront and clearly states how the data will be used.

Moreover, as consumers become more educated about how a company is using their data, they want a personal, tangible and immediate benefit in return — 65 per cent see tremendous value in their data and 58 per cent of them are willing to share it with companies in exchange for some form of value. We call this the “give-to-get” ratio and managing this trade-off transparently is essential for trust to grow and for companies to succeed.

There is no such thing as blind trust in today’s business world. In the digital era, consumer trust is driven by data ethics, transparency and the give-to-get equation. Winning companies will radically change their business models to break away from the old mentality and take risks to revamp their customer engagement strategy and deliver value that matters most to consumers. The growing value and quality of the data that companies gather have changed not only the way products and services are delivered, but also the way consumers make decisions.

Technology and transparency

Companies must develop self-control based on openness and accountability — regulations will always be behind the curve compared to technological advancements — and build data ethics framework, while giving customers a delete button to control their information.

Here is a framework that can help companies build and maintain customer trust.

Ensure manageable “gives” and positive “gets”: If the “give” factor is imposed upon consumers in a cryptic and non-transparent way (such as a dense description of terms, followed by an “I Accept” button), trust can be instantly damaged.

Give customers a delete button: Customers should have a complete 360-degree view of their information and full control of it.

Tear down the wall between IT and business with a “chief trust officer”: Trust is not an issue of compliance, privacy, security or technology, as many companies presume it to be, but a brand-level risk or opportunity.

The role of the chief trust officer would be to add human intelligence to existing analytics capabilities, and make data ethics a key performance indicator.

Be quick to respond to failures: In spite of world-class technology infrastructures, history shows that organisations cannot promise customers that nothing bad will happen to their digital information. However, organisations need to recognise, understand and proactively manage potential issues.

The law will never catch up, so develop self-control: A discussion on the importance of consumer trust would be incomplete without considering the legal implications and regulatory frameworks that impact digital business. It is important for businesses to focus on self-regulation based on openness and accountability, with an obsession for maintaining consumer trust.

Consumers are a business’s brand ambassadors, and losing their trust will directly impact the brand and the future of the business. Companies that view trust as a brand-building opportunity, and place consumers before profits and their own self-interest will be best equipped to sail through the choppy waters of trust-driven business disruption.

The writer is senior director at Centre for the Future of Work, Cognizant

Published on September 09, 2016
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