Leveraging Trust and Transparency to Win Over Customers, Increase Sales, and Nail Key Metrics
Leveraging Trust and Transparency to Win Over Customers, Increase Sales, and Nail Key Metrics
Statistically, customers probably think you're screwing around with their data. In 2023, trust and transparency are vital to business success.
In recent blogs, we’ve done a lot of talking about the positive impacts of zero-party data collection from the perspective of a business. Improving key metrics such as ROAS, eCPM, and LTV and decreasing others, such as CAC, increasing ATT (iOS App Tracking Transparency) opt-in, sorting out copyright issues for AI training data, opening additional revenue streams by re-selling data on secondary marketplaces, and much more.
Contained in these blogs are obvious benefits from the perspective of the consumer, namely in the form of earning perks and benefits such as coupons, discounts, access to exclusive features, and more. This week we’re going to dive into some of the most important benefits and learn about why it’s a benefit for businesses, too. And that benefit? Why of course, it’s trust transparency! Yes, the things that elude most businesses today and words that are used so often they seem to have almost lost their meaning. Trust me, it’s not the easiest thing in the world to start a company that touts transparency as one of its foundational pillars, and the reason for that is it seems as if every dang company nowadays is preaching transparency in some shape or form. But when you dig into the details, the levels of trust and transparency always vary, and oftentimes transparency just means “a little bit more transparent than we were before, when we got in trouble and eroded tons of trust.”
Of course, there’s a bit of generalization there; there are plenty of other reasons to adopt more transparent policies. The privacy initiatives we’ve spent tons of time talking about, like the updates on iOS 14.5, Google’s phase-out of third-party cookies, GDPR, CCPA, etc., are a main driving factor in many business pivots in policy, branding, communication, marketing and advertising.
When it comes to the consumer, most believe that businesses are taking data from them anyway. 62% of U.S. adults say it is impossible to go through daily life without companies collecting data about them. 79% report concern about how their data is being used by companies, with 81% saying the potential risks outweigh the potential benefits. So how does a business maneuver around negative sentiment surrounding data collection when it has become, and will continue to be, an integral part of its business operations? Well, I hope the title and introductory paragraphs didn’t give it away. It’s transparency. But not just buzzwordy-corporate-faux-transparency…actual easy-to-understand (59% have very little or no understanding of what companies do with the data they collect) transparency. And not just easy-to-understand transparency—transparency coupled with control.
The State of Consumer Sentiment on Data Collection
Whether you’re sitting down in your first Sociology 101 class, reading studies of consumer-business relations, or scrolling through Instagram and finding over-saturated motivational posts from your peers, you’ll find that trust, transparency, and open communication lead the way for maintaining healthy relationships over time. It makes a lot of sense. Even if you think you’re some type of alternative Sixth Sense Haley Joel Osment because you always know when someone in a car on the highway is looking at you, even though you can’t see them, the fact remains that we aren’t great at reading each other’s minds or gauging each other’s true intentions. Maybe Elon Musk is in the process of sticking something into your hippocampus to make this possible, but until then we’re relying on what people say, and cross-referencing it with what people do.
This is why much of the recent epidemic in “transparency” initiatives falls on deaf ears or quickly deteriorates. Because words need to match with actions. You can say you’re transparent, but I can Ask Jeeves and figure out the last time you had a data breach. I can visit your website and see if I truly understand your privacy policy. If you accidentally leave your phone unattended without the lock screen kicking in, I can snoop through your text messages. Damnit, Becky! Kidding on the latter, of course. But the point remains, trust is earned, transparency reflects action and not words, and damnit Becky! Really? A 76-day Snapchat streak with Coffee Shop Ben?! How dare you!
One obvious remedy to the transparency paradox is the element of control. Maybe you can’t control Becky, but in theory, consumers should be able to control their data. The advent of omnipresent cookie banners is a notable example of this: when you visit a website, you’re presented with a bunch of toggles or checkboxes, and you, in theory, can control the types of data that are being collected. Most people (69%) are only vibing with the “strictly necessary” cookies unless they’re otherwise goaded into accepting some of the other cookies. But most people don’t read that stuff. And if they do, they don’t really understand what the heck all the legalese really means. Not very transparent of you, cookie banner deployers!
According to a Qonsent study, 51% of people say having control over their data would make them more secure, and 49% say it would make them feel more empowered. When it comes to controlling personal data across connected devices in their home, only 12% believe that will ever be possible. So that 51% and 49% are representatives of guesswork—here’s how I think I’d feel if I even had the option to control my data. Surely those numbers would decrease, or increase, given actual anecdotal experiences with a brand.
Overall, 94% of consumers say having control over the data they provide and how it is used is important. To have control over how data is used requires transparency. Businesses need to let customers know the purpose of their data collection, including which data is being collected (i.e., in-app behavior), what the data is being used for (i.e., to improve attribution), how long it is being used, and, in our case here at TIKI, what the customer is receiving in return. After all, as we often cite, 85% of consumers would trade certain types of data for coupons and discounts. The desire to share in-app behavior in exchange for attribution would become stronger if the consumer understood that this meant more relevant ads and personalized discounts.
This means being transparent is essential. A customer will trade this for that. End of story. It doesn’t also mean they’ll trade this for that, but also some other stuff that is a bit shadier that wasn’t mentioned in the initial agreement. Consumers are knowledgeable. They see all the stories about hacks and breaches and misuse of data, and that’s only the information that is made public.
Like a 1920s detective, they also have hunches: 79% of U.S. adults believe companies wouldn’t publicly admit to making mistakes or take responsibility when misusing user data. 69% aren’t confident businesses would use data in ways they feel comfortable with. 65% don’t believe businesses would promptly notify users if data were misused or compromised (Pew).
In short, the majority of consumers believe businesses are fucking around and acting irresponsibly with their data. At the very least, they believe if a business does something shady, they’re going to Fort Knox it and not let anyone know (unless they must).
So, what is the solution? Let me drag the needle back to the first groove: be actually transparent with consumers, give them real choices, and earn their trust.
Let us turn it over to a quote from none other than Jessica Simpson.
Trust and Transparency: A New Frontier
“Privacy is no longer a box brands check to hit a compliance requirement. A privacy-first approach to marketing that focuses on your most valuable asset, your customers, and preserving their data dignity, is a true competitive advantage. Trust is the new currency, and if you can operationalize the privacy experience for your consumers whether it is in a 1:1 setting, where they have seen enough value to give you permission to speak to them directly, or in a broader, mass setting, where you are working to earn that right to speak to them 1:1, you will set yourself apart from the competition and create an experience that is both notable and valued.” – Jessica Simpson, SVP, Solutions Consulting
Okay Jessica! We see you. We’ve come a long way from Chicken of the Sea, I see! It’s tough to keep track with all these new currencies, but I’m picking up what you’re putting down. In this quote, Jessica is essentially trying to recreate the ideal relationship she alluded to in her 2003 hit “With You,” except now it is a relationship between a consumer and a business, and not Jessica and Nick Lachey. Probably a good move, considering they divorced 3 years later. ANYWAY…
The point is, with most people thinking businesses are completely irresponsible and opaque when it comes to their data, the ability to formulate a relationship based on trust, communication, and transparency is, as ChatGPT would say, a SUPERpower to help SUPERcharge your business!
Digging back into the Qonsent study (thank you for doing the dirty work for us), we find that 84% of consumers are willing to share info with businesses with an (actual) transparent approach, 83% put more trust in brands with that level of transparency, 77% say data transparency impacts their purchasing decisions, 47% try to purchase more from transparent brands, and a whopping 92% are very or somewhat likely to use a service that lets them see and control their personal information. Very convenient for us here at TIKI!
Let’s jump into an abbreviated example of how TIKI can help accomplish this valued relationship with customers (while also making you more money, I might add!)
Chubbies Is an Online Shop With a Pineapple Logo, So I Picked Them For this (Mock) Case Study
(I know it says it in the section title, but this isn’t a real case study, just an example of how TIKI could work for a brand like this. People keep asking us. Case studies with actual customers are coming soon!)
The problem: Data privacy is really throwing a wrench into the Chubbies brand marketing and advertising. They’re not collecting the same level of accurate personal data that they were able to collect years ago, when their brand burst onto the scene with a myriad of highly-targeted and viral campaigns. Chubbies is looking to release a new pair of shorts, the Even-Shorter-Than-Short-Short-Shorts and have a hefty budget attached to their new product and associated launch. With their new product, Chubbies is looking to keep a low CAC, optimize their ROAS, and build LTV with consumers by funneling new and existing sales into their pre-existing rewards program. However, their data for potential leads is not as strong as they would like it to be, and while their ChubClub (this isn’t the real name of their superfans, but maybe it should be) was large and mostly loyal, Chubbies wanted to take a next step into growing their email list and winning over lifelong customers to purchase their $60 shorts and other apparel. They knew they had to maintain transparency in this effort in order to gain and preserve the trust of its ChubClub. Fortunately…
The solution: Chubbies naturally gravitated toward TIKI due to the jovial nature of their pineapple mascot and the cutting-edge brand voice of their content. They had a plan for what they wanted to do, they just needed the technology to accomplish it. Fortunately, Chubbies being a Shopify shop, meant that they could take advantage of the new TIKI Shopify app. Chubbies plan was to open up a new revenue stream based on the re-sale of zero-party consumer data which cycled back to consumers in the form of custom and personalized discounts and loyalty points toward their reward program.
Chubbies quickly integrated the TIKI app, and were able to transparently incentivize participation in their loyalty program by communicating to the ChubClub the exact use cases for sharing data, such as their IDFA, with Chubbies. From here, Chubbies collected consensual zero-party data they used to identify the chubbiest of the chubsters in their ChubClub, and created a target audience for their new ad campaign. Chubbies leveraged this information to incentivize customer-created content that stayed true to the Chubbies brand for their new Even-Shorter-Than-Short-Short-Shorts.
This funneled even more new consumers into their reward program, and via the TIKI app, they were able to collect even more zero-party data on their consumers. This data, as agreed upon by the Chubsters, was deidentified and sold on a secondary market, with a portion of the revenue going back into their own reward program, adding coveted and personalized offers that would increase sales and the LTV of their loyalists.
The result: The campaign was a smashing success! Every quad-god in the land was rocking the Even-Shorter-Than-Short-Short-Shorts, which made a ton of sense, as their target persona was indeed, the QuadGod. Thanks, zero-party data sourced from TIKI! Existing QuadGods made customer content that attracted other QuadGods (and aspiring QuadGods) to join the ChubClub and make purchases.
With the appropriate data consensually given to Chubbies, they fine tuned their ad campaigns, achieving the lowered CAC and higher LTV and ROAS they desired. By opening a new revenue stream based on deidentified data, Chubbies was able to delight customers with custom and personalized offers and bonus reward points, which achieved their goal of increasing brand trust and loyalty, with the first domino being the leveraging of actual transparent practices to ensure its customers had real control over their data. At their annual party, Chubbies made sure to repeatedly thank both TIKI and Jessica Simpson.