portrait of a person with a skeptical look on their face
PHOTO: Thomas Jörn

Eighty-one percent of consumers today agree that “trust” is a deal breaker or deciding factor in their buying decision, according to the 2019 Edelman special report “In Brands We Trust?” And yet only 34% of consumers “trust” most of the brands they buy or use. This discrepancy poses an opportunity for differentiation and is part of the reason why major brands like Gillette and Nike are weighing into heavy political issues with their advertising: all in an effort to build customer trust. It’s also the reason why Apple is, in part, investing in privacy as a differentiator in order to separate itself from big tech. 

So how do brands capitalize on this lack of trust and ultimately build customer lifetime value? And how do they avoid being seen as opportunistic? Start with the area getting the most attention these days: privacy.

Why Privacy and Consumer Trust Go Hand in Hand

Similar to the Edelman report, PwC’s 2018 Global Consumer Insights Survey found “trust” in the brand ranked highly into people's purchasing decisions. So where does privacy fit into all of this? Following a spate of high-profile data breaches and data privacy violations, consumers are turning to regulators to look for more protection. Dubbed by journalists as a “techlash,” 2018 saw consumer trust erode in technology companies and social media, leading to laws like the California Consumer Privacy Act (CCPA) due at the start of 2020 and the proposed New York Privacy Bill. As regulators ramp up their efforts in protecting consumer data across the globe, marketers are finding it more challenging to operate in a post-GDPR, while also preparing for life post-CCPA, era.

What’s often overlooked as new privacy legislation is introduced are the benefits of a more cohesive privacy program for brands. In a paper titled “Taking Trust Seriously in Privacy Law” for the Standard Technology Legal Review, Professors Woodrow Hertzog and Neil Richards argue that privacy laws, like the GDPR or CCPA, do more than simply protect consumers from the “creepy” aspects of over-personalization. These laws provide opportunities to establish trust between consumers, brands, and their institutions. By taking privacy seriously, companies can strengthen their relationship with customers and build customer loyalty. “Trust is necessary for a sustainable digital future, and trust-promoting privacy rules can create [value].” 

By establishing and promoting privacy conscious efforts, organizations can use these new laws to their advantage as a way to build consumer trust and ultimately grow their customer lifetime value.

Related Article: Marketers, Data Collection and the E-Word: Ethics

Understanding Consumer Trust

As part of the ever-increasing shift towards online, the UK’s regulatory body Ofcom recently launched a new annual report, Online Nation, which looks at what people are doing online, how they are served by online content providers and platforms, and their attitudes to and experiences of using the internet. The idea of ‘trust’ brought some interesting results, with the research finding only 31% of Facebook users trust the platform to protect personal data and use it responsibly, and YouTube trust levels are only slightly better at 34%. However, on the flip side, trust was highest (67%) for the BBC News site, closely followed by Amazon (66%).

When Ofcom analyzed web tags present on the top ten news, entertainment, search, social media and ecommerce sites in the UK, it became clear that despite enjoying high levels of trust from consumers, news sites in fact host more tags on average than any other category of site. Perhaps this is reflective of the difficulties in the sector, with publications relying on selling page views and user data to stay afloat.

Related Article: Marketers Are Missing the Point of the GDPR — And the Opportunity

Look to the Apple Model

How can you make the shift towards building consumer trust by way of privacy? Follow the example Apple is setting with its recent advertising campaigns and software updates. Apple’s upcoming release of iOS 13 — the latest version of the operating system that powers its iPhones, iPads and AppleTVs — highlights changes that Apple is making in building consumer trust and differentiating itself from the other big tech companies. New features like the ability to “sign-in with Apple” encourage users to take more control of their data and provide Apple with another way to build consumer trust. Where most apps offer the convenience of signing in using a Facebook or Google account, users seldom realize that in doing so their information is then shared with the tech giants. This change in iOS 13 allows users the ability to sign-in to apps using their iCloud account and not have to share a personal email or tracking information with the app maker. 

Apple has invested in making consumer privacy a key difference between their brand and the other tech giants. But why bother? How does it actually benefit Apple or other similar brands?

Why Trust Matters

Trust-based marketing isn’t new. Neither are privacy regulations, particularly in Europe. But what is different is the amount of choice consumers have and the break-neck pace at which brands are constantly competing with one another to drive revenue. Given the number of substitutes available in any given market and the technological breakthroughs that have nearly eliminated the barrier of entry in most industries, marketers are looking for any way to strengthen customer loyalty and grow their customer lifetime value. 

KPIs previously focused on vanity metrics like “time on site” have shifted towards these more meaningful metrics like Customer Lifetime Value, and for good reason. Edelman’s report shows that brands stand to benefit financially by building consumer trust by way of increased customer loyalty, advocacy and top-of-mind. In other words, trust builds customer lifetime value. And while consumers in the past have willingly forgone their privacy online for convenience, a recent study by Gartner suggests that’s quickly changing.

Avoiding 'Trust-Washing'

But know this: building consumer trust isn’t a one-and-done solution, nor is it a single marketing campaign or event. I should add that the same consumers who are expecting brands to take societal change seriously are also acutely aware of false pretenses. Fifty-six percent of respondents in the Edelman’s report believe that too many brands are using societal issues as marketing ploys to sell more product. 

At the 2019 Cannes Lions International Festival of Creativity, Unilever CEO Alan Jope told an audience of brands and advertisers that “woke-washing,” or “trust-washing,” will further erode consumer confidence in brands. His advice, along with the findings of the Edelman report, highlights the need for brands to make conscious efforts to change practices to support societal change not just pay lip service to them. An example of positive change is the Dove+Men’s campaign that not only used advertising to highlight their commitment to societal change but also announced the organization is also offering $1 million in funding to support programs supporting paternity leave in the United States. This action along with messaging results in a more powerful campaign that should cut through consumer skepticism. 

Regarding consumer data privacy, “trust-washing” can be easily spotted by brands that use boiler plate text to explain how “we value your privacy” while maintaining incredibly complex privacy policies that do nothing to inform the user of their rights. If it’s unclear for me as a consumer what you do with my data and why you use it, can you really say you “value my privacy?” How can trust be earned when the attempt seems so superficial? Your message should be matched by your efforts to be seen as genuine, and starting with how you present a user’s data privacy rights is a start.

Related Article: The Changing Nature of Trust

Use Privacy and Trust as a Differentiator

As your marketing and content teams look for ways to strengthen your organization’s position in the market and grow overall customer lifetime value, consider how “trust” plays a role in not only driving that initial customer transaction but in also ensuring loyalty over time. It’s the “funnel before the funnel” as we say at Crownpeak. Committing to the principles of transparency and fairness — the bedrock of any modern privacy law — not only benefits the consumer but also the organization that takes this role seriously. It builds trust in a way that can strengthen your relationship with the customer and encourage repeat business. 

In short, trust — particularly that which can be gained through privacy — is essential not just for business consumer relationships but for our modern digital society. Or as Hartzog and Richards wrote in 2016, “… trust is the glue that holds together virtually every information relationship.” 

With eroding trust in brands, businesses and institutions, getting trust right is going to be the basis of competition and differentiation in the next five years. And in a highly competitive digital age where product/service differentiation only nets you a temporary competitive advantage, investing in customer experience, trust and using it as a brand differentiator can have longer-lasting benefits.