Customer trust:
Building trust
with customers

Customers have gone digital in droves, particularly as the pandemic pushed many of them to move a large portion of their work and personal lives online. But they have also become more discerning about the data management practices of the businesses they engage.

According to recent Verizon research, trust is the most important factor in earning and keeping customer loyalty. But how do you build trust with customers while still maintaining a competitive edge? Here are a few key strategies for building trust with customers that can help you actively improve loyalty or recover customer trust when necessary.

Customers know that businesses are collecting their data for the purpose of giving them personalized experiences. Some customers are more comfortable with sharing data than others, however. For example, customers ages 18-34 are more likely to freely share their personal information, while customers ages 45-65 are more likely to recoil from the idea of doing so. That said, 64% of all customers disapprove when brands use third-party data, especially when this happens without their informed consent.

For this reason, transparency is key to building trust with customers when using third-party data. Most respondents (52%) said they would continue dealing with a brand even after learning that it had obtained data without their consent—as long as the brand acknowledged what it was doing. A quarter of them would insist on knowing the identity of the third-party source, while 15% of them would demand that the brand promise to stop using third-party data altogether.

These findings indicate that customers increasingly desire to have informed consent as well as a certain measure of control over how their data is used. They want convenient and satisfying customer experiences, but they don't want to give brands the power to use their data in any way they see fit.

Offering customers some control over the depth of analytics that the company applies to their information (by providing opt-ins, for example) is one effective way to build trust. And it's a positive step toward creating a customer-centric culture.

Customers are concerned about the security of their data, and with good cause. More than a quarter of all survey respondents (28%) have had their data compromised, misused or shared within the past two years. Customers that have a more open approach to data sharing are the most susceptible to a data breach—58% of them have experienced at least one incident during that time frame. Twenty percent of customers that are more cautious about data sharing suffered a data breach in that time, while 25% of the people who are especially uncomfortable with the prospect of data sharing found themselves in the same situation.

Spam is the most common impact of these data breaches. But customers also reported more serious consequences such as identity theft, financial loss and reputation damage. As a result, many of these customers—especially those that have already been adversely affected by a data breach or are inherently skeptical when it comes to data sharing in the first place—want confirmation that businesses are following best practices for protecting their data.

So how do you build trust with customers after a breach? Building trust with customers in this situation will require your company to take three actions:

• Acknowledge that the breach has happened
• Promise not to share customers' personal data in the future
• Explain the steps your company is taking to improve its practices

Your brand needs to do all of these things in short order, demonstrating that it has taken ownership of the problem and is accountable for addressing it. Companies that follow these steps are much more likely to establish customer trust and regain customer confidence.

Businesses have their work cut out for them when it comes to building trust with customers. They must be transparent about how they use customer data, especially third-party data, when providing a digital customer experience. They must also give customers more control over how their personal information is used. Government regulations, such as the General Data Protection Regulation (GDPR), may also mandate that companies adhere to certain rules for handling and protecting customer data. Complicating the situation even further, cyber attackers are deploying increasingly sophisticated attacks in an attempt to capture that valuable data.

Given all of these challenges, how do you build trust with customers without losing a competitive advantage? One effective approach is to work with an experienced partner that has deep expertise in customer experience best practices as well as cyber security. For example, the right partner can provide you with customer experience solutions that boost satisfaction and retention as well as end-to-end customer experience consulting services to help you create better experiences, drive results and mitigate security risks. Together, you can design a customer experience that both delights your customers and gives them confidence in your brand.