Privacy: Reduce your Customers’ Concerns by Building Trust First

Before making a purchase from you, buyers need to trust your company and think that your products and services will do what they are supposed to. Do your marketing and online practices help establish the trust necessary to convince prospects to buy from you? What is the connection between privacy and trust? Evidence shows that the two are closely correlated.

Since the beginning of interpersonal communication, trust has been perhaps the most important influence on information disclosure. Then, when commerce started, people would trade with those individuals whom they trusted and would avoid those who were perceived as non-trust-worthy. Intrinsically subjective and hard to define, trust is a function of the amount and type of control one has in a relationship. Social exchange theory advocates that individuals weigh both the costs and rewards in deciding whether to engage in social transactions. Aided by a little common sense we can conclude that if the rewards outweigh the costs, then the individual is likely to enter into an exchange relationship whereas if the cost outweighs the rewards there will be no exchange. This trade-off occurring inside people’s minds should not be overlooked since it ultimately determines whether they will buy from you or not.

The same process takes place in cyberspace. That is, the risks of disclosing personal information are weighed against the benefits when deciding to provide information to a website. Hence, trust is critical to disclosure in both interpersonal and online relationships. This is where privacy concerns come in.

In a previous article; “How to write a privacy policy”, we said that privacy involves protecting our integrity as individuals and our right to disclose or not to disclose our personal information to third parties. Since technology has become such a powerful enabler of data collection and utilization, one of the biggest IT responsibilities is making sure that the personal information their systems collect is protected from misuse and abuse. Who draws the line that separates them both? This seems to be quite an intricate issue.

As a consequence of the terrorist attacks of September 11 2001, increased security is a reality in today's world. As the US government collects more personal information about its citizens, are Americans really confident that their personal information is being safeguarded without their privacy being compromised? A survey conducted by the Ponemon Institute, a leading privacy think tank, in September 2003 uncovers some interesting findings. The more than 6,000 Americans who participated in this first annual Privacy Trust Survey were asked to indicate their confidence, as it relates to protecting privacy, regarding 60 different government agencies. The overall results indicated that the majority of Americans surveyed (83%) consider privacy a matter that is important or very important to them. Nonetheless, many respondents indicated they have a high level of uncertainty about the government agencies that collect and use that information, thus creating a negative impression of those organizations. The survey also showed that protecting personal information is important to people of all ages, education and income levels. Among the organizations scoring the highest were hospitals, doctors, banks and the U.S. Postal Service. Those ranking lowest included retailers, grocery stores, telephone companies and the newly created Department of Homeland Security. Although at a first glance it might seem somewhat strange that two federal government agencies could score so differently on the survey, a closer look would explain the apparent discrepancy. When you compare the two, it is easy to see why consumers trust the mailman more than the people fighting terrorism. The Postal Service has more than a century of proof it can be trusted, while the Department of Homeland Security does not yet have such proof.

A number of studies of interpersonal exchange situations have confirmed that trust reduces the perceived risks or cost involved in revealing private information. As a case in point, Jarvenpaa and Tractinsky in their ‘Internet Consumer Trust Model’ (1999) found that trust increases confidence in a company, which lowers the perceived risk of electronic exchange with that company and, therefore, increases the likelihood of consumers engaging in electronic transactions. Similarly, Swaminathan et al. in the ‘Exchange Model’ (1999) established that consumers prefer to do business with web sites that they perceive to be reliable, honest, consistent, competent, fair, responsible, helpful, and altruistic, all of which are main components of trust.

All of the above indicates that the role of trust in facilitating disclosure is especially critical in online exchanges, where computer-mediated communication replaces physical contact. Other potential issues on the Internet include; technical difficulties for people who are new to the online world, lack of ability for consumers to physically inspect goods prior to purchase, and new companies that have not been in the market long enough to establish good reputations. Trust is important because it contributes to building a good or bad image of the company before the customers’ eyes. Negative images are very hard to change. This is why this is such a delicate and critical issue.

So what can you do to get your customers to trust you? The following tips can help you build trust, increase sales, reduce your customers’ privacy concerns and keep them coming back.

•Reduce Perceived Risk: Consumers' overall regard for a company strongly influences perceptions of trust and perceived risk. Personal evaluations are made on the basis of many things, for example, firm reputation or personal experience with a company. Nonetheless, in the case of new companies where reputation and personal experience are lacking, personal evaluations are made on the basis of a company's observable attributes or signals, such as, self presentation through advertising, customer service interactions, or stated policies. Also, one of customers' biggest concerns is how well your product or service will perform. It is important that you clarify the value you provide and state your commitment to ensuring that your customers are extremely satisfied about your product and services. You must use all communication means at your disposal to enhance the customers’ experience on your web site, which in turn will reduce their perceived risk.

•Use Clear Language and Give Examples: It is also important that you post a clear privacy policy on your web site and that you use Plain English in every piece of information you write. Many web sites like to use sophisticated language to look professional but they fail to see that they might be losing customers as a consequence. Giving examples is a good tool to increase credibility. Tell a story instead of making impersonal and exaggerated claims of what your company or your products do. Use case studies to tell what you did for whom and the difference it made in their lives or their business.

•Personalize Your Marketing: Personalizing your communications is definitely a trust booster. People like to do business with people – not with faceless companies - and they feel a lot better when you refer to them as ‘Bob’ or ‘Mary’ than when you simply call them ‘Dear Customer’.

•Give Something Away: Evidence suggests that when you give something to people, regardless of the cost, they are more likely to trust you and return the favor by buying something from you or providing you with more of their personal information. For example, you can use an ebook, an article, a workshop or a free demonstration to build trust.

•Adhere to Recognized Seal Programs: Enhancing perceptions of web site privacy protection via features such as privacy statements and seals helps increase regard for the company and trust. TRUSTe and BBB Online are two well regarded seal programs that can contribute to your efforts of building trust. In addition, you can take a step further by telling your visitors that your web site adheres to anti-spam practices by displaying The Anti SPAM League seal. This organization, formed specifically to combat the spam problem, has a seal program for web sites that are concerned about email communication. You can become a member for free by visiting www.AntiSpamLeague.org.

•Make Contact Easy: If you want clients to get in touch with you, make it easy for them to contact you. Put your phone number and your other contact information on all your marketing materials – including your web site -. When you call them, give them your phone number again at the end of the conversation and tell them to call. This is another powerful way to build trust.

•Stay in Touch: The people you see and talk to on a regular basis are usually the ones you trust the most. If you sell services or high end products, a personal phone call is one of the best ways to answer prospects questions, and to establish trust. If you have a web site, it is a good idea to periodically contact your customers through newsletters containing information you think might be of interest to them. One key point here: make sure customers have manifested an interest in receiving such information and have given their permission via an opt-in option or another similar mechanism. Remember that permission always builds trust, rapport and respect.

As stated before, the degree to which Internet users think a commercial web site protects their privacy will positively influence their overall regard for the company and trust of the company's web site. Once achieved, trust becomes one of the company’s most valuable assets. Not only does trust eliminate skepticism, but it also has the power to transform visitors into customers for life. Following these guidelines can help you avoid missteps that can negatively impact your brand, public goodwill, and customer satisfaction/loyalty (e.g., ‘trust’).

If you want to learn more about this and other related topics, check out www.Anti-Spam-League.org. This organization offers free membership and the chance to access a wide amount of relevant information on privacy, spam, email abuse, Internet fraud, responsible marketing and several other topics.