The relationship between customer loyalty and data

It’s clear that customer trust has taken a hit over the past few years – which is why it’s so crucial for businesses to start taking control of the situation. Increasing customer loyalty is all about increasing customer trust; without it, consumers are likely to look elsewhere.

2020 was an incredibly active year for data policies and customer privacy. We’ve had Facebook’s data privacy scandal as well as Google’s $5 billion lawsuits for tracking private internet use.

These data breaches, along with a greater demand for data privacy policies, have eroded customer trust. Consumers have started to take a greater interest in how their data is being used and protected, leading many to choose companies on the basis of their data policies.

A survey conducted by Harvard Business Review reveals just how important data protection is to consumers. A staggering 97% of those surveyed expressed concern over how their data is being used by businesses with 72% reluctant to share information at all.

Developing customer trust is key to conversion rate optimization (CRO) and business growth. By making customer privacy a core foundation of your business you’re more likely to gain trust and enhance the customer experience (CX).

Having a competitive edge over other businesses goes beyond just providing a seamless user experience or unique selling proposition. Customer trust and security are just as integral. To help you, we’ve analyzed five ways you can gain customer trust with comprehensive data policies.

1. Be a transparent and open business

Engage in open and honest conversation with your customers – let them clearly know how their data is being used and protected. Since the EU GDPR came into effect in 2018, data protection compliance is not only a legal matter but a matter of trust and honesty.

Gaining customer trust can be achieved by simply being more transparent about your business practices and how you approach data privacy.

Inform customers of the different privacy systems you have in place and how data is being processed and stored, but most importantly, make them a part of the process. When accessing your content and services provide them with the ability to make choices about data usage.

This can be as simple as writing up a blog post detailing how your customer’s data is being used and what information is shared where. Thus providing them with a chance to understand your data policies in full. You could also consider setting up a manifesto that details your privacy and data ethics, so customers can rest assured that you’re doing all you can to protect their security.

Making data privacy a central part of your business gives you a competitive edge; so be proud of it. Inform customers of how their data is being safeguarded through blog posts, videos and email updates across all your channels. This is a great way of increasing trust through transparency as you’re making all the information accessible to customers easily.

You could even include your data policy on your homepage, making it crystal clear that your business stands for customer privacy.

The key is to make data protection a central part of your business rather than simply a regulation to follow. Once customers can see that you truly value transparency they’ll be more likely to do business with you. 

Regularly keep up with data concerns and be quick to address them to continue building trust over time. This can be achieved by monitoring feedback and complaints including your latest Shopify review or NPS feedback.

2. Privacy by design

Established in 2009, privacy by design is essentially a framework that encourages businesses to make data privacy a foundational part of all systems and practices.

Simply put, it’s a framework that focuses on a top-down approach to the incorporation of data privacy.

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Instead of simply tweaking a few aspects of your business, privacy by design is an approach that encourages you to integrate data privacy into the heart of your operations. If you want to establish a firm reputation as a business that values customer trust and data privacy, this framework could be a beneficial option.

This means restructuring all systems towards data privacy, using a top-down approach to ensure resources are allocated accordingly and all staff is on board. Embedding data privacy into your design means offering a fully secure and encrypted UX, being transparent, and continually evolving your data policies over time. 

It also means constantly questioning which practices are user-centric and put data protection first, weighing up options like the security of companies like 8x8.

Adhering to a privacy by design framework will greatly increase your chances of gaining customer trust. It’s a truly attentive way of operating business and means you’ll need to home in on privacy at every level. From picking a shipping time and delivery slot to the moment, to just clicking on your landing page, all CX bases have to be covered.

It requires attention to detail and continuous development but building customer trust and loyalty will go a long way towards increasing both new purchases and customer retention and, in turn, your profits.

3. Embed data privacy into your company’s work culture

Don’t just make data privacy a transparent conversation with customers--develop it into your company work culture too.

This is the only solid way you’ll be able to implement long-lasting changes that are geared towards protecting data privacy. Without the support of the whole team your efforts to build and retain customer trust are likely to slide.

Embedding data privacy into the workplace means training all recruits on the company’s data policy stance and how important it is to business. Be sure to provide comprehensive information on all your data policies and systems during the onboarding process so recruits know the importance of a customer-centric business model. 

Just because work might be remote doesn’t mean you should neglect this part of the training. Discord alternatives or platforms like Zoom can still be used to provide this information.

Regularly provide training updates so all employees are aware of any changes made to the data policy over time – this can easily be scheduled via a shareable calendar. Ensuring staff are properly equipped with this knowledge means they will be better able to respond to customer concerns and queries about privacy. Your customer support team will also be better able to navigate issues and provide the best source of action.

Consider appointing a department to specifically oversee the protection and regulation of customer data. This department will deal directly with any data privacy issues and concerns, regularly sharing updates across the board. Having a data protection officer could be a good starting point and as you train more recruits you could consider making them part of a wider team effort to implement data protection.

Customers want to be valued and knowing that a whole team is working on data privacy will reassure them that you have their best interests at heart.

4. Make data privacy the default

To establish a reputation for protecting customer privacy your business should go beyond compliance. Not adhering to the GDPR incurs hefty fines but if you want to make your business truly transparent and user-centric your handling of data privacy should be less of a legal matter and more of an ethical one.

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Make data privacy the default, rather than a legal afterthought. A simple way to do this is to draw up a code of conduct geared specifically towards the ethics behind consumer-business relationships. Consider putting data privacy at the heart of your code of conduct and don’t be afraid to show it off.

The more vocal and transparent you are about your values and practices the more likely it is that customers are going to do business with you. Include it in your bio across all your channels so it’s easily accessible to the public. 

Even developers need to keep your values in mind in order to build confidence among your staff as well as customers. Creating a business with user needs at its heart should be a collaborative effort to keep everyone involved at each stage of the process.

5. Have backup plans in place

As well as regularly revising your data policies and protection systems, be sure to implement a back-up plan if data is lost. Despite your efforts, there is still the chance customer data could get lost to a failing system or mechanical damage – so have a back-up in place.

As part of your data protection policies consider implementing a data backup system; this way customer data can be protected even in worst-case scenarios. Make sure you have plenty of data-retrieval options at your disposal in the event that data is lost and communicate this clearly with customers.

Making consumers aware of your efforts to safeguard their data, going so far as to implement a backup plan, will show them that you truly value their privacy rights.

Gaining consumer trust will only go a long way if you are actually vocal about your practices and safeguarding efforts so include all this information on your website.

Regularly creating content to showcase your efforts to protect customer data will continually assure consumers that their data is being handled with care and that you’re a forward-thinking business.