For a business to succeed, it must build consumer trust in the products and services it provides. Back-office transactions must be copper-bottomed to prevent fraud and a data breach. If problems occur, the customer should trust in the mechanisms put in place to rectify the problem quickly. It’s not enough to sell goods or services more cheaply than your competitors. The customer also expects a flawless buying experience from ordering through to delivery.

Trust and Its Role in Ecommerce

Customers identify with successful brands. They want consistency in their lives. People like stability, the feeling of belonging. They don’t want to switch brands for no good reason. Why go to someone else if XYZ has offered me great products and service, they say? To switch might mean to take on an unnecessary risk. It’s this mind-set which encourages customer loyalty.

This is why the big companies pump millions of pounds into promoting their brand. It’s so they can secure for themselves a profitable customer database running into the millions. Really all they are doing is tapping into the primal fears of the consumer. A successful marketing strategy smooths away that fear. It replaces it with a warm, oozing trust and a trigger-happy finger for the Buy Now button.

So what is trust? Trust is both an emotion and an act of logic. In logical terms it’s the outcome of comparing probabilities for gain with those of loss within any specific circumstance. If the probability of receiving goods is perceived to far outweigh that of being diddled by the website owner, then a transaction occurs. Flip those probabilities round and you get distrust, and a lost customer.

As online sales technology increases in sophistication, so too does consumer acumen. There’s plenty on the Internet to educate shoppers. News stories, blogs, reviews, feedback. There are even websites devoted to exposing scams and frauds. With a little research, consumers can make savvy risk assessments on any corporate website. Trust ratings can rise and fall daily as a result.

Trust is never consistent but always under scrutiny. Any whiff of malfeasance and that trust evaporates. As author, M.J. Arlidge, says, "Trust is a fragile thing - hard to earn, easy to lose."

There are many ways to earn consumer trust. Prompt delivery and competitive pricing are just two. Data privacy protection is the trending bellwether of consumer trust.

Why CEOs Need to Treat Risk Like Consumers

A study by Deloitte University Press highlights the problem. It shows how CEOs underestimate consumer expectations of privacy. While 50% of company executives believe their data policies are robust, only 37% of consumers agree.

The lessons are clear. CEOs must adopt a consumer mind-set. They must view online security through the eyes of a consumer. Only this way can they hope to develop an effective corporate privacy policy.

The Silver Lining - Competitive Advantage

The next step is to take a training course in GDPR. This will align your company’s data privacy rules with the new EU regulations. But GDPR training is not only about evading monster fines and mustering up a sense of corporate duty. There’s a silver lining to all this extra business regulation. Instead of creating a privacy policy that reads like a legal document, you can turn it into an effective marketing tool. 

Compliance with the new GDPR regulations demands all privacy policies are written in clear, concise text. This includes writing it in a font large enough to read without risk of migraine. Fine print in this case could lead to a printed fine: one despatched by GDPR auditors for noncompliance.  Drafting a privacy policy that's coherent and risk-free brings benefits. Not only will it gain you the respect of your existing customers but it will bring in new custom too.

Part 2 of this blog will discuss how you can use data privacy protection to your competitive advantage. Including: ways to build consumer trust, boost your brand, and increase your revenue – all by using good privacy protection. 

Interested in this topic? Check out the academic study Building Consumer Trust, by Pat Conroy, Anupam Narula, Frank Milano and Raj Singhal.

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