How Likely Are Europeans To Share Their Private Data?

by | Jul 5, 2021

Monica Grosso, Professor of Marketing at emlyon business school.

The majority of organisations are trying to tap into the potential value that comes from being more data-driven. Research by MIT professor Erik Brynjolfsson found companies that embrace data-driven decision making have output and productivity that is 5-6% higher, whilst Richard Joyce, a Senior Analyst at Forrester stated, “For a typical Fortune 1000 company, just a 10% increase in data accessibility will result in more than $65 million additional net income.”

There are very clear benefits for companies who do gather as much data as possible. Whether it be increasing future sales to customers, tailoring marketing efforts to their needs, and boosting customer brand loyalty, customers personal data is needed in order to maximise these efforts.

However, customers are often reluctant and unwilling to provide such data on a voluntary basis. This is often due to numerous reasons, whether it be a lack of trust in the company or the vast number of high-profile privacy scandals, which have made customers increasingly worried about how organizations store and exploit their personal data.

This gives marketing departments the tricky task of trying to convince customers to provide as much information as possible to the company, in order for the company to inform future marketing efforts and tailor these as best as possible to their customer and potential customer base.

But, with it being such a hard task to convince these customers to share their private data, is there a best practice way in order to gather data, or does a company’s strategy need to differ depending on who they are targeting?

This is what I looked into, with my colleagues from Bocconi School of Management, KU Leuven and the Center for Service Intelligence, CEFAM International School of Business and Management, to discover whether there was one key strategy that companies can take to maximise as much data as possible, or whether there are certain factors that can impact upon the sharing of data.

The factors we reviewed were, whether the type of product had an impact, whether the country consumers were from had an impact, and whether and how customers could be incentivised to provide further data even if they weren’t willing to in the first place.

In order to do so, we interviewed over 22,000 online shoppers globally to who were buying products from seven different categories; identification, medical, financial, locational, demographic, lifestyle, and media usage data. The participants came from fourteen different countries, ranging from highly individualistic, such as the UK, France, the United States, Canada and Australia, to collectivist nations, including China, Brazil and South Africa.

Taking a look at the European countries, what was interesting to see was the unwillingness for countries to share their data with companies across the board. This is likely due to the individualistic nature of such countries, as other Western countries like the US and Australia were similar in their thought-process.

The European countries where customers were interviewed, the UK, France, Italy and Spain, all had a very low approval rating of companies who ask for their personal data when purchasing products, and low willingness to divulge this information to companies who ask.

Whilst in terms of the more collectivist countries, such as China, Brazil and South Africa, customers were much more likely to pass on personal data to the companies they purchase off and willing to share personal information.

So, what does this tell us?

Well, for companies that are looking to gather more data from their customers in order to maximise the information they have, and thus maximise sales and target marketing, it clearly shows that there is no one size fits all approach for securing personal data from customers.

Companies looking to do so on a global stage have to clearly take a very different strategy to obtaining and utilising data from European countries than they would from a country like China for instance. This is why it is important for companies to do thorough research on the local context they work within and how it can be impacted on the global stage.

How can companies secure more data from reluctant customers?

Through our research we found that offering compensation and incentives for sharing personal data, meant consumers were more likely to provide their data to companies. This compensation and incentives included a tangible benefit for the customers, such as discount coupons or small free gifts, showing that there are clear, effective methods for companies to use to garner more data from their consumers.

It’s clear that data is an incredibly valuable tool for companies to use in their marketing efforts to customers and potential customers, but it’s also incredibly difficult to get buy-in from consumers, especially in the European context. Therefore, if companies are looking to collect vital data from their customers in different country contexts, they should adopt different privacy strategies based on the information type, country, and product category, and also explore the use of incentives to persuade consumers to do so.

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