Survey finds responsible use of personal data is essential to gain customer trust and maintain loyalty

Survey finds responsible use of personal data is essential to gain customer trust and maintain loyalty

More than two-thirds of British consumers cut ties with a company and turned to a competitor because they felt the original firm had mishandled their personal data and could no longer be trusted, new research from customer insight firm Transactis has revealed.

The survey of more than 1,000 UK consumers found that 69% of respondents had terminated their relationship with a company within the last three years because it has handled their private details irresponsibly, getting them wrong, passing them to third parties, failing to keep them secure, or otherwise abusing their trust.

An even greater majority of consumers say they would likely take stern action against a company if confronted with similar circumstances. An overwhelming 95% of survey respondents said they would be “very inclined” to switch to a competitor if they felt a company they were dealing with was being irresponsible with their personal details.

Supermarkets lead in trust stakes

Supermarkets led the sector breakdown of the results in which 84% of respondents rated their them ‘good’ or ‘very good’ at handling personal details responsibly. But other retailers trailed behind banks in second place, with 80% and 81% of respondents respectively.

The holiday/hotel/travel sector was one of the lowest performing categories with just 45% of consumers rating them as ‘good’ or ‘very good,’ and firms in financial service sectors other than banking also received low scores when it came to their use and care of customer data.

By contrast, the research found companies that prove they are responsible stewards of consumers' personal data are rewarded with customer loyalty. If a business was seen to deal responsibly with personal data and, in doing so, provide a good service, 83% of respondents said they would keep buying from that firm.

Personalisation improves service

Similarly, 76% of the consumers said that if they see a company is using their personal details to tailor services and offers – in other words, making effective and responsible use of their data – they are more likely to continue buying from that firm than its competitors.

Michael Green, Transactis insight director, commented that the results clearly demonstrate that consumers will not hesitate to take their business elsewhere if they see any negligent or improper handling of their personal data – in other words, if they no longer trust a firm. “By the same token it is also evident that if consumers see a company using their personal data responsibly and effectively, they are far more likely to remain loyal,” he said.

“The careful and intelligent use of personal data engenders consumer confidence and, ultimately, trust – allowing a stronger relationship with a customer to flourish,” Green concluded. “When companies alienate customers and lose their confidence by handling personal details irresponsibly, however, consumer punishment is harsh and damaging, as they turn their back on a brand they feel has abused their trust. Firms that fail to learn that lesson will feel the financial impact in a very direct way.”