The Privacy Paradox: The Ultimate Challenge for Marketers and CX Professionals
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It is one of the most important issues for marketers and CX professionals in the rapidly digitalizing economy. And the issue is only getting bigger: how should we deal with the privacy of the consumer, while the same consumer asks for more personalized services? What can marketers and CX professionals do to find a balance between the opportunities and the risks in the use of personal data?
Consumers are increasingly using the internet and social media. They are leaving more and more personal data behind. This offers enormous opportunities for organisations. If they can use this data, they can make their offering and services increasingly personal. At the same time, consumers are becoming increasingly aware of their privacy and are therefore increasingly paying attention to the fact that their privacy is protected by the organisations that have access to this data.
When it comes to privacy there’s something strange going on with consumers
On the one hand, consumers are very wary of and watch out for the use and misuse of personal data. On the other hand, they give away this personal data just as easily. They do this if there is only a very small reward in return. Think of finding information on a website or collecting likes. They give away data, for example, by putting data about themselves and what they do on social media. Or by blindly clicking ‘accept’ when they are asked to agree to the cookie settings. And thus giving organizations the opportunity to track them in their search and purchasing behavior.
This contradiction between intention and behavior is also called the privacy paradox . The privacy paradox concerns the willingness of consumers to share personal data in order to use certain products and services. Consumers have shown in numerous studies that they are concerned about the use of personal data, but they do not really act on it. The existence of the privacy paradox has major consequences for how organizations deal with customer data. Both in the private and public domain.
The privacy paradox concerns the willingness of consumers to share personal data in order to use certain products and services.
A year before the adoption of the European General Data Protection Regulation (GDPR), a survey showed that two-thirds of Europeans were concerned about a lack of control over personal data. A majority of them also felt uncomfortable with companies’ online activities and the personalisation of advertisements (European list of philippines consumer email Commission, 2015). You might therefore expect consumers to be reluctant to use platforms such as Google, X, Facebook, Instagram and Snapchat. Nothing could be further from the truth.
Convenience plays an important role
There are a number of reasons why people still share their personal data, despite the risks that may be associated with this. One important reason is that people tend to look for the path of least resistance. to merge or not to merge: what does this mean for your agency? According to the American professor and psychologist Daniel Kahneman, people are naturally looking for convenience .
People are lazy creatures by nature. We try to waste as little energy as possible and will therefore do as much as possible on autopilot. It is therefore a lot easier to click ‘Agree’ when asked whether you accept the cookie settings of a site, than to read the privacy statement carefully first. And most users of social media have probably never delved into the associated privacy statements.
What certainly also plays a role here is that there is now a certain privacy aleart news fatigue among consumers. People simply find it too much trouble to delve into the privacy settings every time.
‘Optimism bias’
There is also what is called an ‘optimism bias’. This is a type of cognitive bias that causes someone to believe that they are less likely to experience a negative event. You see something as a risk, but think that it will not happen to you as quickly. The ‘optimism bias’ is very common and transcends gender, ethnicity, nationality and age.
Scientific research has shown that there are 4 factors that can cause such a bias:
The desired end state
Its cognitive mechanisms
The information he has about himself and others
His general mood
For example, the optimism bias occurs in people who believe that they are less likely to become a victim of crime. Or in smokers who believe that they are less likely to develop lung cancer than other smokers.
Although the optimism bias occurs for both positive events (such as believing that you are more financially successful than others) and negative events (such as being less likely to have a drinking problem), it appears that the bias is stronger for negative events (this is called the ‘valence effect’).
These two types of events have different consequences. Positive events often lead to feelings of well-being and self-esteem. Negative events lead to consequences that entail more risk. Think of exhibiting risky behavior and not taking safety precautions. The latter seems to be the case when it comes to sharing personal data.
Short term versus long term benefits
Another phenomenon that plays a role in whether or not to share personal data is that scientific research has shown that consumers are more likely to choose short-term benefits than long-term benefits. Even though these long-term benefits are higher than the short-term benefits. With regard to personal data, individuals will tend to underestimate future risks associated with a personal data breach. Instead, they will prefer immediate satisfaction of needs.
Also read: How do you protect the privacy of your website users?
Another factor that plays a role in the willingness to share data is the extent to which the customer is familiar with the product, service or provider. Scientific research has known for a long time that users of websites are more willing to share with websites they know than with websites they do not or hardly know.