Customer Data: Designing for Transparency and Trust

By: Morey T., Forbath T., Schoop A.

May 2015

With the explosion of digital technologies, companies are sweeping up vast quantities of data about consumers’ activities, both online and off. Feeding this trend are new smart, connected products—from fitness trackers to home systems—that gather and transmit detailed information.

 

Though some companies are open about their data practices, most prefer to keep consumers in the dark, choose control over sharing, and ask for forgiveness rather than permission. It’s also not unusual for companies to quietly collect personal data they have no immediate use for, reasoning that it might be valuable someday.

 

As current and former executives at Frog, a firm that helps clients create products and services that leverage users’ personal data, we believe this shrouded approach to data gathering is shortsighted. Having free use of customer data may confer near-term advantages. But our research shows that consumers are aware that they’re under surveillance—even though they may be poorly informed about the specific types of data collected about them—and are deeply anxious about how their personal information may be used.

 

In a future in which customer data will be a growing source of competitive advantage, gaining consumers’ confidence will be key. Companies that are transparent about the information they gather, give customers control of their personal data, and offer fair value in return for it will be trusted and will earn ongoing and even expanded access. Those that conceal how they use personal data and fail to provide value for it stand to lose customers’ goodwill—and their business.

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