Friday, August 24, 2018

Loss of Consumer Trust Can Be Costly

Written by Krista Garcia
For more, go to eMarketer:

It's logical to assume consumers might lose trust in a company after a data breach or misuse of personal information. But many businesses vastly underestimate the severity of these security mishaps in the eyes of their consumers.

An April 2018 CA Technologies and Frost & Sullivan study demonstrates this perception gap. They aggregated variables like consumer willingness to share personal information online and the belief that companies protect their information to come up with a digital trust score ranked on a scale of 0 to 100. US internet users gave businesses a trust score of 61, the same as the global average. But businesses gave themselves an average score of 75 when asked if consumers trusted them.

This is important because levels of trust correlate to spending. Consumers across all levels of trust—low, moderate and high—increased spending in the past 12 months, but low-trust consumers decreased spending by larger margins. Forty-three percent of low-trust consumers (those with index scores under 55) increased spending, while 15% decreased spending. By comparison, 57% of high-trust consumers (those with scores of 70 or higher) increased spending, while only 4% spent less.

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