Data protection: How SMEs can secure online consumers’ trust

Consumers believe how a company treats their data reflects how they treat their customers, according to a new survey.

B2B software search website Software Advice has revealed the results of a study analysing how a company's data practices can affect online consumer trust.

To collect the latest accurate data, Software Advice interviewed more than 1000 Australians who shop online at least once a month, to see whether consumers value companies that value their privacy.

Online threats, such as cyberattacks and data breaches, call for organisations to prioritise data protection so customers can trust that their personal information is in safe hands. The study revealed that a staggering 90% of survey takers viewed how a company handles consumer data as a sign of how it treats its customers.

According to the survey, data can give an in-depth insight into consumer behaviour to help an organisation deliver a better, personalised experience, so SMEs must be mindful of how they collect, use, and protect their customers' information.

Half of the respondents (50%) said they wouldn't pay extra for a private version of a product. In contrast, the other 50% said they would pay more for a product or service if the company did not collect or monetise their personal information.

For SMEs, getting to know as much about existing and potential customers as possible can help build brand connections and strengthen personalised customer experiences. Interestingly, 67% of consumers are happy to share personal information if it means accessing better, more efficient products or services. However, 63% prefer to see ads rather than share their data, the survey showed.

Regarding ways in which online companies can earn the trust of a new customer, a combined total of 93% of respondents said it relies on how clearly a company explains how they will protect their data. 43% of survey-takers said the most significant online data privacy challenge is understanding how companies use the data they collect - proving the need for SMEs to use a more transparent data collection process.

"Online consumers in Australia are cautious about how companies use and protect their data," says Andrew Blair, content analyst at Software Advice.

"They think regulations are necessary despite trusting that organisations are using their data responsibly," he says.

"However, divided opinion between Aussies in their willingness to share their information shows trust disparities in how organisations use their data," Blair says.

"Companies that clearly explain how their customers' data is protected are edging ahead- gaining online consumer trust.