Facebook’s privacy demonstrates that online privacy concerns have not diminished over time and with increased use of these social networks. In fact, millennials (that elusive, but important segment of younger, affluent consumers) are very privacy savvy. Since privacy concerns are not going away, marketers need to find a way to deal with them.
In a recent study conducted with consumers across the US and Europe, we find that not all consumers are the same — there are variations in how consumers feel about privacy, what things they feel offer protection online, and how they respond to their privacy concerns. The study finds 4 groups (segments) of consumers:
- Pragmatists
- Concerned Users
- Unconcerned Users
- Minimalists
Some consumers feel privacy policies, such as the hotly contested ones used at Facebook, guarantee promised levels of privacy. However, despite the prominence of these discussions in the media, this is not a large group of consumers. In fact, most consumers don’t take the time to read privacy statements and those that do, don’t understand them because they are too complex and long. More seriously, most consumers don’t BELIEVE the promises made in privacy statements.
How do consumers respond to their concerns over online privacy?
- many won’t shop online – most online sales are from existing online users an 80/20 situation
- most won’t access online financial data – such as bank statements
- many don’t share on social networks, like Facebook
- some won’t even use email or only open emails from known sources
- Many won’t visit websites from companies they don’t know and trust
While these actions have serious negative implications for online profitability, in combination, they can be a death knell. For instance, if they won’t visit your site because you don’t have an established reputation, they won’t buy from your site. And, if they won’t share on social networks, its hard to develop an online reputation they will see — thus, pull strategies won’t be successful. If they won’t open emails from unknown sources, you aren’t likely to see success from you push strategies.
So, how does an online marketer deal with these privacy concerns? It’s important to know your visitors and offline customers and which group they fall into – the study uses a short, multi-item scale to measure this. Once you’ve identified your consumer groups, there are several ways to deal with it. If your consumers are Pragmatists, consider yourself lucky because you probably don’t have to do anything special to meet the lower level of privacy concerns among these consumers. However, if you have significant numbers of consumers from the other groups, you need to make SUBSTANTIAL changes in your privacy strategies.
- Step 1 – FIND OUT HOW CONCERNED YOUR VISITORS AND OFFLINE CUSTOMERS ARE ABOUT THEIR PRIVACY
Use my scale or another reputable scale to measure how concerned your consumers are about their privacy. Once you have data from a sample, you can perform hierarchical clustering to see which privacy groups are represented. Find out if you have 1 prominent privacy group or whether multiple groups are represented. The value of my scale is that you can determine not only the privacy group your consumers fall into but how to develop effective strategies for alleviating these privacy concerns.
- Step 2 – DETERMINE WHETHER YOU NEED A SINGLE PRIVACY STRATEGY OR MULTIPLE
If you have more than 1 privacy group represented and you feel like you can’t ignore the needs of some of these consumers by developing a single strategy, then you have to test all consumers to categorize them into a privacy group. Multiple websites will have to be developed employing those strategies that are most likely to alleviate privacy concerns for a private group. Information on the private group for a particular visitor can be coded into customer login information or attached to their cookie info so that they will see a website they
- Step 3 – DETERMINE WHICH ONLINE STRATEGIES TO AVOID
This means your online firm will have to make some trade-offs between gathering visitor information and alleviating their privacy concerns. For some visitors, this will mean allowing access to your website without exchanging personal information. While online marketers may prefer to gather email or other information from all their visitors to aid in future marketing efforts, ie. outbound email marketing, insistence on gathering this information will not benefit the organization. Instead, visitors with privacy concerns will bounce from your site without seeing your valuable content. If your competitors don’t require this information, they’ll get the business rather than you.
Online firms should also seek to develop strong relationships with customers since even consumers concerned about privacy are likely a feel safe with firms they know. Participation in social media, reputation management, and the use of offline promotional events are some successful tactics for developing these relationships. For instance, your firm might enter a team to compete in a local or national charity events, such as Koman’s Walk for a Cure or the March of Dimes. You can attend a Red Cross blood drive as a group. Your firm can adopt a highway. There are lots of social responsibility opportunities your firm can use to develop strong relationships with customers and prospects. Make sure you optimize these activities by getting both online and offline PR for your efforts.
- Step 4 – MONITOR CHANGES IN ONLINE PRIVACY
Sometimes, an individual’s level of privacy concern change over time. While privacy concern appears to be a stable personality trait, media reports, of privacy invasion or stories of invasions from friends can change a consumer’s need for privacy. Also, as technology changes to allow new website features and strategies change to include new online tactics, these innovations need to be assessed for their ability to heighten privacy concerns.
What is your firm doing to address these privacy concerns? Is it working?
Contact me if you want a copy of the full report on this study.
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