Building Loyalty Comes Down to Trust

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Concerns about Internet privacy have skyrocketed -- particularly in recent months, as media reports on privacy breaches by Internet companies have stirred public concern. Cogit.com decided to gain a better understanding of the issue by commissioning Equifax Direct Marketing Solutions to conduct a custom survey.


Three important observations emerged from the findings. First, the survey reinforces the degree to which consumers want information they share with Internet companies to be protected. Second, the results show consumers are not very trusting of privacy policies or e-verification companies' symbols and logos. Third, the survey reveals a high level of understanding regarding privacy-related technologies, including cookie technology and opt-out.


Most importantly, the survey illustrates that Internet companies must take a proactive role in understanding consumers' privacy concerns, educate consumers about business practices that relate to privacy matters and operate in a way that both services and protects the consumer. The burden weighs heavily on Internet companies to establish a bond of trust with consumers to achieve success.


Cogit and Equifax contacted 40,000 individuals nationwide via e-mail to solicit participation in the survey. From June 15 through June 29, 11,523 consumers participated in the survey by logging on to www.privacysurvey.com.


Findings from the study reveal:


• Eighty-eight percent of respondents are either somewhat or very concerned about personal privacy when online.


• Seventy-eight percent of respondents said they want to be somewhat or completely anonymous when online.


• Respondents are either very concerned (41 percent) or somewhat concerned (38 percent) with e-mail spam.


• Forty-nine percent of respondents opt out either "frequently" or "all the time."


• Forty-four percent of respondents allow their Web browsers to monitor for cookies.


• The practice of tracking site and purchasing behavior at one site and providing that information to another site was found unacceptable by 56 percent of respondents.


• Sixty-one percent of respondents will provide personal information in exchange for e-mail offers and promotions.


• Sixty-three percent of respondents said media coverage of privacy issues is deficient. Only 33 percent of respondents are confident that current media reporting is accurate.


• Seventy-three percent of respondents said government regulation of privacy is important.


Not surprisingly, respondents are concerned about the security of their information on the Internet. Almost all respondents were "very concerned" about how their personal information is being used by Internet companies. Awareness of privacy-related practices, such as e-mail spam and sharing, tracking and capturing personal information, is high.


Respondents learn about privacy through the media. However, a large percentage of respondents said that media coverage of privacy issues is deficient. If consumers think the media are not doing a good enough job educating the public about privacy, shouldn't businesses take a more active role in educating the consumer about privacy protection?


Respondents are skeptical of privacy policies and third-party certifications. Eighty-eight percent of respondents said they're aware of a privacy policy on the sites they visit most frequently. However, when asked about the level of trust of a Web site that contains a privacy policy, only 6 percent said they completely trust a Web site with a privacy policy. So, while a privacy policy may be noticed, it is not completely trusted. Nor is TRUSTe certification (13 percent trust completely), BBBOnline certification (15 percent trust completely) and consumer privacy groups (6 percent trust completely).


Overall, the level of consumer trust is low across the board for each of these privacy protection methods. For Internet companies, this means that third-party certifications alone will not earn trust.


Most respondents understand cookie technology. Sixty-one percent said they're knowledgeable about electronic cookies. This knowledge of cookie technology is also seen as many of these respondents are monitoring or controlling their cookie activity. Forty-four percent of respondents said they monitor cookies, 26 percent use cookie software and 49 percent use opt-out frequently or all the time.


The good news for Internet companies that are implementing personalization techniques -- more than half of respondents (55 percent) said that cookies are either valuable or somewhat valuable. And 61 percent of respondents said cookies are acceptable. Only 16 percent said cookies are not acceptable. Most consumers recognize value in cookie technology but want to maintain control.


Companies vying for business online need to recognize that consumer privacy concerns are real and, indeed, warranted. The Internet makes information dissemination quick and easy. Information can be consolidated, hacked and abused. And, as a result of some Internet companies mishandling or abusing the personally identifiable information that they have collected, consumers are more aware of privacy issues -- and more distrustful that their personal information will be protected -- than ever before.


To overcome the burden placed upon them, Internet companies must first and foremost build trust. An obvious and clearly stated privacy policy is important to consumers, but it's only a first step. Online, consumers cannot evaluate the physical space of a store and cannot touch the product. Often, Internet companies have no brand name or history to vouch for them. Consumers, therefore, rely on images and promises. Business sense -- and common sense -- point to the same conclusion: To build a successful e-business, first build trust.


• Peter Corrao is CEO of Cogit.com, San Francisco. Reach him at corrao@cogit.com.
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