Trust is integral in the relationship between your business and your customers. If your customers don’t trust your business practices, processes, or marketing, they likely won’t be customers much longer. You have to work hard to build — and keep — trust with your customers.
One major component of building trust in your customer relationships is explaining how you collect and use customer data. In our modern digital age, customers are becoming more concerned with how businesses are using their data. It’s not hard to see why: Between data breaches and data scandals, customers want to know their information is safe.
Creating transparency in data practices can help retain trust with your customers. Let’s look at why you should be transparent in your use of data and how to do it.
What is Data Transparency?
Modern businesses are using data to drive business decisions to improve their organizations. This means most organizations are collecting more information on their customers than ever before. This is great for businesses. Data-driven decisions allow you to pinpoint problem areas and make direct improvements to your organization.
For customers, however, data collection could potentially open them up to security issues like data breaches. This means your customers should have access to and control of the data you’re using.
With many companies collecting personal information, customers need to know what is being collected, how it’s being used, and if their information is being sold elsewhere. This is the basis of data transparency. It’s the idea that customers should know what a business is doing with their data.
Why Do You Need Data Transparency with Customers?
Have you ever signed up for an email newsletter to receive the latest deals from a shop, only to get more emails than you can handle? In fact, most of the emails you get aren’t from the original business at all. It would seem the first business shared your information with other businesses.
It could be that this business shared your information without consent. However, it’s just as likely that the business wasn’t being completely honest with their plan for your data when you joined their list.
This is frustrating and will probably cause you to stop working with this business. If the company had been upfront with their plans for your data, you might have been more comfortable with the situation.
Now imagine if the same thing happened with one of your customers. There’s a good chance you’d lose a customer. They might even leave negative reviews or pursue legal action against your business.
By incorporating customer transparency in your data, you build trust with your customers. This ultimately creates stronger customer relationships and retains customers for the long term.
How to Build Transparency in Data
Overhauling your data collection and use policies is a daunting task. The good news is there are a lot of small steps that can help improve your data transparency. Follow these tips to make your data policies more transparent for your customers:
- Give Control to Your Customers: It’s tempting to keep control of the data you collect. However, giving your customers the ability to delete or edit the data you’ve collected will build trust through transparency.
- Ask for Customer Consent: Have you ever signed up for a service or newsletter and had the option to accept or reject data collection? Asking your customers for consent to collect and use their data puts the power back into their hands. This helps customers feel more confident in the security of their data.
- Make Data Transparency Your Priority: You won’t reach transparency if you don’t commit to it. This means getting everyone at your business on board. You’ll probably need to present your data transparency plan to executives. A good plan focuses on the importance of transparency to help encourage data employees to implement the plan.
- Address Customer Concerns Early: If a customer contacts you with concerns about data collection or use, address them directly. Take the time to listen to their concerns and fix the problem. Addressing data security concerns right away helps your customers feel comfortable that you’ll do the right thing to protect their data in the future.
- Remove Unnecessary Customer Data: You collect a lot of data, and you hope to use all of it one day. However, many businesses end up with a lot of customer data that they’ll never use. You can improve your transparency and customer trust by regularly deleting unused and unnecessary customer data. Be sure to let customers know you won’t hold on to data you don’t need.
- Train Employees in Data Security: Any employees that regularly use customer data should be trained in privacy and security processes. This helps reduce the chance of a data breach due to human error. You’ll also feel more confident in your transparency plan, knowing that your employees are trained to keep data secure.
- Perfect Your Privacy Policy: If you collect data, you need a privacy policy. This policy explains the data policy for your organization. It should include how you collect data, what type of data you collect, how you use data, and if any third parties are involved in data collection or use.
- Regularly Tell Customers How You Use Their Data: From your marketing strategies to your sales pitches, you should put your customers at ease about data use. For example, add a disclaimer to marketing emails letting recipients know what you use email data for.
Make a Commitment to Data Transparency
Building a transparent data policy doesn’t have to be complicated. The biggest challenge is making a commitment to data transparency and giving control to your customers. If you need help making your data policies more transparent, 5P is here to help.
Our experienced data security experts will look at your current data collection and storage and use systems to provide feedback on ways to improve your data use policies. Get a free consultation to learn more about being transparent in your data policies.