The majority (64%) of customers trust companies with their personal information. However, Baringa Partners warns that businesses will have to work much harder to maintain levels of trust when General Data Protection Regulation (GDPR) comes into force on 25th May 2018. Baringa’s new report – GDPR: The new frontline in corporate reputation – explains how customer behaviour is changing and advises companies on preparing to meet their demands.
Companies would be wrong to assume that data privacy is an issue the public are unaware of or uninterested in. The research reveals many customers would take serious action in the event of a significant personal data breach, with up to 55% at risk of walking away from their bank, energy company or TV, phone or internet provider. As many as 30% of affected customers would ‘switch provider immediately’ and a further 25% would ‘wait to see a media response or what others say and do’ before switching.
The findings also show that customers are likely to care more and do more about their data privacy in future. Under GDPR, individuals will have the right to find out whether or not personal data concerning them is being processed, where and for what purpose. Companies will be obliged to return a free electronic copy of the individual’s personal data within thirty days, a service up to 70% of customers say they are likely to take advantage of. No company knows exactly how many customers will submit such a request, but firms with millions of customers are likely to face serious operational challenges.
Daniel Golding, Director at Baringa Partners, comments: “It’s easy to assume that customers largely ignore issues like data privacy. But even if you believe that people don’t truly consider something until it happens to them – a data breach, for example – the perils of treating customers as indifferent are made clear by our research. Given the expected rise in data breaches under GDPR, the potential threat to customer retention highlights the choices companies need to make now for the sake of their business.
“Preventing the loss of confidential data is paramount. Preparing to act in the event of a breach is also critical. However, soon companies will no longer have the option of communicating with customers only when things go wrong. Consumer behaviour is changing and companies will not only have to respond quickly and fully to customer queries about how their data is stored and used, they will need to be in a position to engage them in all sorts of other conversations.”
To earn a reputation for good data privacy management, companies must go beyond hygiene factors. Those that strive to better understand their customers’ fears and needs, and actively communicate the mutual benefits of data sharing, will discover opportunities to gain a competitive edge over their peers.
Companies are currently some way off this reality. The majority of customers (67%) do not want to share additional data about themselves with their existing providers, and even fewer would be happy for this information to be shared with third parties (74%). However, the main reason people would be happy to do so is to ‘get cheaper products or services’ (18%), demonstrating that where there is tangible value in it, customers are more open to sharing their data.
Daniel Golding adds: “Ultimately, companies should strive to be in a position where customers actively share additional information with them because they are trusted to use it well. Get there and a whole world of opportunity opens up, in creating truly bespoke products and services, anticipating and responding to changes in behaviour and trends, and rewarding and retaining customers. GDPR can set a new path for growth.”
For more information or to arrange an interview please contact:
Jennifer Evans / Jo Nussbaum / Jessie Nicholls
020 7089 2080
About Baringa Partners
Baringa Partners is an independent business and technology consultancy. We help businesses run more effectively, navigate industry shifts and reach new markets. We use our industry insights, ideas and pragmatism to help each client improve their business. Collaboration is central to our strategy and culture ensuring we attract the brightest and the best. And it’s why clients love working with us.
Baringa launched in 2000 and now has more than 500 staff and 50 partners across our four practice areas of Energy and Resources, Financial Services, Telecoms and Media and Consumer Products and Retail. These practices are supported by cross-sector teams focused on Strategy and Analytics, Business and Organisation Transformation, Supply Chain, Programme Delivery, Process and Operational Efficiency, Risk and Compliance, Customer Experience and Information Technology.
In 2017, Baringa Partners was ranked 1st Place in the UK Best Workplaces™ list by Great Place to Work® UK. This is the 11th consecutive year the firm has won an award for its inclusive and engaging company culture. In 2016 Baringa achieved Master status, when it became a ‘great place to work’ for the 10th year in a row.
Baringa. Brighter Together.