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European consumers are concerned about how brands are using their data

Companies have been driving a wedge between them and their customers by misusing the personal consumer data they’ve collected. This generates a level of mistrust and has even caused many consumers to avoid these brands. To give us a better understanding of this situation, we look into the Adobe Trust Report* and an interview conducted with Claudia Senik, a professor at the Paris School of Economics.

European consumers are concerned about how brands are using their data

data usage

* Disclosure, Adobe is a client of Visionary Marketing

The Data Concern of the European Consumer

Claudia Senik (drawing)

The Adobe Trust Report EMEA research study focuses on seven countries including Belgium, Denmark, France, Germany, Netherlands, Sweden, and the UK. Evidently, 75% of consumers are concerned with the personal data that is being collected and how their data is being used.

Claudia Senik The study found that most European consumers worry about how brands will use their data and care even more about having the ability to control how the data is being used by these companies.

71% of European consumers are concerned with how their data is being used

78% of European consumers say it is important to be able to choose how companies use their data

Are Consumers Giving Consent Too Quickly?

Claudia Senik The fact of the matter is that most consumers care about how their data will be used, but when it comes to taking action, they tend to simply click “I agree” without much forethought. In contrast, unconsciously giving up that care when entering a site.

The cost imposed by frequently checking the conditions attached to the data usage of a site is less than the time saved by blindly accepting it

This is a phenomenon that behavioural economics has highlighted. In fact, people tend to take the path of least resistance especially when there are time or cognitive restraints. In this case, most people tend to blindly enter sites rather than reading through the allowances to select which data they are willing to share beforehand.

Is Consumer Data Privacy a Concern for Companies?

Great trust is granted by the consumer. Companies are expected to keep the collected data secure and private and treated with great importance.

The study found that only 43% of executives declare that having strong data privacy is a top priority for their company

66% of these executives believe that the benefits the consumers will receive will outweigh the potential risks.

Consumers don’t feel the same.

Only 25% of consumers agree that the potential benefits will outweigh the potential risks

Facebook ethics bearing cross
Street Art: Zuckerberg bearing his cross – Paris St Jacques (2019)

When I got started in my dorm room at Harvard, the question a lot of people asked was ‘why would I want to put any information on the Internet at all? Why would I want to have a website?’

And then in the last 5 or 6 years, blogging has taken off in a huge way and all these different services that have people sharing all this information. People have really gotten comfortable not only sharing more information and different kinds, but more openly and with more people. That social norm is just something that has evolved over time.

  • Mark Zuckerberg

The Price of Trust

Claudia Senik Trust is a bet on the behaviour of others.

This characterizes a situation where a large number of individuals are interdependent and don’t exactly know how others will behave. They have simply to guess or anticipate the behaviour of others and whether that behaviour is going to be mutual.

Trust is capital that accumulates over time through experience or through validation

Claudia Senik The single most important thing a brand can do is earn the trust of its consumers. A brand that betrays its consumers’ trust by using their personal data inappropriately will lose them permanently. This ultimately leads to loss in profit.

57% of consumers state that once a company has violated their trust they will NEVER give them their business again.

This is called brand aversion, a huge penalty faced at the cost of a brand.

In the book, Crises de Confiance, there is a study coordinated by Claudia Senik that showcases this exact phenomenon.

The more trust consumers had in a brand to which they were loyal, the more likely they were to retaliate when the brand violated its commitments

Consumer Data: Hearing the Warning

Claudia Senik and this Adobe study have shed light on the importance of trust. They display a few of the consequences businesses receive in retaliation for breaking this trust factor.

However, many companies still do not seem to understand the importance (despite the increasingly strict regulations) of handling consumers’ personal data.

In conclusion, consumers are complex and contradictory beings. That said, there still are certain limits to consumer data usage. Although, only time will tell if the brands that fail to heed this warning will suffer.

Jared Roth

Jared Roth

Jared is a senior Business Administration major with a focus on Supply Chain Management and Logistics at Arizona State University. Based in Milwaukee, Wisconsin currently located in Paris, France with Visionary Marketing.
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