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PHOTO: Ricardo Gomez Angel

"Existential – this word is often used when the fact of someone or something's being — its very existence — is at stake.” ― Dictionary.com word of the year, 2019

I started 2019 with an appeal to C-level executives that went like this:

“If you make only one New Year’s resolution for 2019, it should be this: use personal data intelligently, transparently and ethically. Be aware of what customers are thinking when it comes to personal data protections (PDP) and tune your activities accordingly.”  

I suggested this resolution because the spotlight shining on personal data collection, data breaches, marketing targeting and social media platforms seemed destined to yield negative consequences to company reputation and customer trust for those who failed to take PDP seriously.

Unfortunately, while the public spotlight on these issues may not be as bright today as it was in early 2019, the negative consequences from poor practices are already piling up and they are, if anything, worse than I anticipated.  

Poor Data Practices Carry a Price

As of last May, one year into enforcement of the General Data Protection Regulation (GDPR), the European Data Protection Board had already received 144,000 complaints. Total fines issued for violations in 2019 was a staggering €428,545,407. Fines were levied for violations across the spectrum of protections including data breaches, selling personal information without permission, not deleting information when requested, improper telemarketing and other consent issues. 

We are not doing a good job on data security either. In just the first six months of 2019, the MidYear QuickView Data Breach Report highlighted 3,800 publicly disclosed breaches exposing 4.1 billion compromised records

These alarming statistics are certainly not conducive to building customer trust. Skepticism reigns supreme as evidenced by this CNN Business Story headline from late last year: “Meet the Facebook Executive Who Wants You To Trust Him With Your Money.” The story details Facebook’s plans to launch a cryptocurrency called Libra. It also highlights the immediate concerns raised by lawmakers, regulators and financial experts, not the least of which is that it would provide Facebook with enough user data to conceivably build a complete picture of people's social lives, buying habits and financial transactions. 

The company is aware of the yawning chasm between its ambitions and its ability to gain the trust needed to move forward. David Marcus, the executive referenced in the story said this: "The onus is going to be on us to demonstrate that we're actually worth people's trust, and we will have to make strong commitments when it comes to privacy."        

Related Article: Facebook: A Case Study in Ethics 

A Tale of Two Customer Surveys

The trust issue goes way beyond Facebook. Whether or not we can rebuild the trust of our customers is at this point an open question. And we are not moving the needle. Consider what consumers told us in these two surveys, one published in late 2018 and the other, CX2030, published quite recently.

In the first survey, which focused specifically on privacy and trust, 73% of respondents said their concern over the privacy of personal data had increased over the past few years and 67% thought the government should do more to protect privacy. In terms of the type of protections consumers asked for — the responses mirrored protections currently afforded to European citizens under the GDPR:

  • 83% wanted the right to tell an organization not to share or sell their personal information.
  • 80% asked to know where and to whom their data was being sold. 
  • 73% wanted to ask an organization how their data is being used.
  • 64% asked for the right to have their data deleted or erased.

CX2030 did not focus on privacy specifically, but instead was designed to predict what customer experience would look like into the future. Privacy, specifically trust, came up as one of the pillars that companies will be increasingly compelled to deal with. 

Unfortunately, when compared against customer trust levels and feelings about data protections, the CX2030 survey showed little progress from late 2018:

  • 76% of consumers are concerned with the amount of data brands gather when they search for or purchase a product.
  • 71% feel companies should not be able to share their data.
  • 78% want to see what data has been collected and want control over changing, updating or deleting this information.
  • 73% are concerned with how brands are using their personal data to the point where they feel it is out of control. 
  • 61% feel they have no control over the level of privacy they need for themselves, their family, or their children.
  • 50% believe brands are hiding “bad things” they’ve done with user data and privacy.

Not only have the percentages not improved much over the last year, the sentiment is overwhelmingly negative. When consumers use phrases like “out of control” and “hiding bad things,” companies had better sit up and take notice. 

When we look at it from a regulatory perspective, the picture is equally bad. In 2018, 67% of consumers said they would look to the government to help regulate data privacy. At the end of 2019, only 43% of consumers felt government was doing a good job regulating data privacy. This does not bode well for consumer confidence in current and impending privacy legislation to improve the situation.  

Industry also fared poorly in CX2030. When asked if consumers trusted 25 industries to protect and not abuse personal data — only one industry (healthcare providers) globally gained the trust of more than half of all consumers. And they just squeaked past the halfway mark, coming in at 51%. North America and Europe fell squarely into a trust crisis with the following results:

  • North America — No industry had 50% consumer trust, and 18 of the 25 had negative trusted/not trusted rankings.
  • Europe – No industry had 50% consumer trust, and overall only 34% trusted companies to protect their data versus 39% who distrusted. 

And the social media companies like Facebook? They ranked dead last, one of the nine industries where the overall level of distrust was higher than the level of trust. 

In answer to the question raised in the title of this article — yes, we are approaching an existential crisis when it comes to trust — and we had better pay attention. As the CX3020 survey conclusion states, “Trust is a key element in the overall customer experience, and brands that cannot provide a high level of trust cannot provide a high level of customer experience.”

Related Article: How to Handle the Crisis of Consumer Trust