There’s more information about people today available then ever before, with most of it coming directly from them. But the more personal and important the information is, the more difficult it is to get it from them. Getting people to like you on Facebook or Twitter is more driven by emotion and impulse. Getting them to divulge personal information addresses their practical side.
Pamela Prentice, Chief Research Officer of SAS, a leading provider business analytics software and services, shares with us the results of a recent study she led that focuses on what it takes for companies to create an environment where customers are more likely to provide personal information about themselves. Information that can help you build a long-lasting relationship with them. (This transcript has been edited for publication. To hear audio of the full interview, click on the audio player at the end of this article.)
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Small Business Trends: Can you tell us a little bit about your personal background?
Pamela Prentice: I’ve been fortunate enough to be on a number of different sides of the research equation. I was in a research supplier company for a number of years after my education. I then went to the private sector doing research at Blue Cross and Blue Shield of Florida. Eventually I moved into academics, where I was a college professor for a number of years. And then was fortunate enough to get a job on the software, information technology side here at SAS.
Small Business Trends: You are the lead author for “Finding the Right Balance Between Personalization and Privacy,” a study SAS recently did. Can you give us a little bit of background on the study?
Pamela Prentice: Our interest was to try to understand what the customer’s perspective of personalization – providing that one-to-one marketing everybody talks about – and the increased notion of privacy concerns about security. In doing the research, we could draw conclusions and help our customers understand more about their customers.
Small Business Trends: Who took the survey?
Pamela Prentice: We had close to 3,000 folks take it. We selected seven countries to interview as the representation of the Americas, Europe and then Asia Pacific. The bulk of respondents were from the U.S. cause that’s where the bulk of our customers are. But we balanced that with respondents from the UK, Spain, Portugal, New Zealand, Australia and Canada.
Small Business Trends: What were some of the main takeaways?
Pamela Prentice: Our study found customers really want businesses they do business with to understand them. But there’s an increased concern over security and privacy that is driven by things the media is reporting on. You see security breaches and the ways in which businesses or government is using information. So there’s that dichotomy of the customer wanting to be understood. But the customer still has this concern over how businesses are going to use their information.
The most surprising thing was the customers in the UK say they’re more likely to give retail entities their personal information than they are to give banks their personal information. Apparently, there’s a lot of distrust of banks among consumers in the UK. So that was kind of interesting.
Small Business Trends: You would think that would be the case here, too.
Pamela Prentice: You would think. Exactly.
Small Business Trends: Maybe that says more about retail than it says about banking over there. What did the survey say about things that make customers feel comfortable about giving their personal information? And what did they expect in return?
Pamela Prentice: The key one is the level of trust the company will keep their information secure. That’s hands-down the number one factor that we saw in our survey. Sixty-three percent of our respondents said that was the number one thing that drove their willingness to give businesses their information.
Then, not a very close second, are the benefits that they get. The free shipping or special promotions. It’s very strongly related to the level of trust and how the customer feels about the company’s ability to keep their information safe. And then next it’s, ‘What am I going to get out of it?’
Small Business Trends: Every time you see customer service satisfaction studies or focuses in that area, a company that really comes up at the top all the time is Amazon. What kind of lessons can small businesses take from the way that Amazon seems to have walked that line?
Pamela Prentice: We talked about those relationships that people have built with Amazon. Never having seen an employee of the business, but so many people do have this personal relationship with Amazon. What Amazon really does well is understand its customers. It uses the information that people basically leave behind, if you will, when they log on to Amazon – whether it’s through a search or a purchase or a save for later kind of thing. That information is then used to develop this relationship with folks that’s turned Amazon into the first place people turn when they want to check prices or check product descriptions or reviews.
Technology drives that. Because there’s nobody back in the office writing note cards like small businesses used to do. But small to medium sized businesses can really capitalize on that model by developing the processes that allow them to understand their customers and create the relevance and value like Amazon does.
Small Business Trends: When you peer out a year or two from now, do you expect that it will be any easier for a company to create the kind of relationships that will allow their customers and prospects to feel more comfortable about providing their customer information?
Pamela Prentice: There will be challenges to keeping that information secure. If customers understand that a company has strong policies in place, then I think that that relationship will continue to grow.
It’s unfortunate that occasionally there’s a security breach that makes everybody a worried about providing any type of personal information. But I think that companies will get better at the security aspect of things. One thing companies need to do over the next 18 months or so is continue to build communication with their customers about how their data is protected. So the customers understand what’s at risk and what the company is doing to protect them.
Small Business Trends: You make a great point because we are in the midst of another with Sony. I guess it’s how the company responds and the kind of policies they have in place to address it when it does happen that impact the comfort level customers have.
Pamela Prentice: Right. It is the quick response. And then making sure the risk on the part of the customer is mitigated.
Small Business Trends: Where can people go online to get a copy for themselves?
This is part of the One-on-One Interview series with thought leaders. The transcript has been edited for publication. If it’s an audio or video interview, click on the embedded player above, or subscribe via iTunes or via Stitcher.