April 18 2019

When Consumers Trust You with Location Data

Consumers are under no obligation to share their data with you. When they do so, it’s a matter of trust. You are ethically and legally obligated to ensure that trust is well-placed. Location-based data is particularly sensitive because it allows you to glean information about where a customer’s mobile device is from moment to moment.
But why do consumers provide your company with this delicate information in the first place? How can you best respect the trust they place in you, and how can you provide your customers with real value in return for their information? Read on to learn more about the importance of customer trust vis-a-vis privacy, and how best to treat users and their data.

The Importance of Privacy

Privacy isn’t just an issue of ethics: it’s the law. Several governments have recently passed laws that require companies that gather data to inform customers of how they use that data, and to give them the information they need to opt out of data collection.

These laws change frequently, so it’s a good idea to research them in greater depth on your own or consult a lawyer. However, it’s clear that the age of companies blithely collecting consumer data is long gone. An increasing number of companies are expressing concerns about the “creepiness” of collecting user data, especially location-based data. And while users are still interested in the convenience they can gain from signing over their data to companies, they’re worried about potential consequences of unethical use and data breaches. Understandably, they want greater control over their data.

Interacting with Customers about Their Data

When you’re using customers’ data, you’re engaging in a delicate dance. Leaving aside the (significant) legal issues, you need to be completely transparent about what you do, in order to build and maintain consumer trust. Follow this advice:

Make your privacy policy as clear and concise as possible. There’s a time for legalese, and this isn’t it: dry, lengthy privacy policies alienate users and leave them feeling suspicious (when they read them at all). After years of unclear privacy policies, many governments are finally demanding that companies make things more transparent. You don’t have to chuck your legal language entirely — it has a purpose — but provide users with a clear summary so they can make intelligent decisions.

Ensure you obtain consent. You shouldn’t just automatically collect a user’s location data. You need to obtain users’ consent before collecting their location information. Additionally, remind users that they can turn off data collection by going to the Location-Based Services section of their phone settings or providing them an alternate way to opt-out of the data collection.

Make it worthwhile to give you data. When customers give up privacy, they should get something significant in return. Most will give you their personal data because they want convenience or personalized content that’s closely related to their experience. It’s unethical to take customers’ data just because you can, and it erodes customers’ trust, so make sure you’re giving them something of value.

Don’t buy and sell data. Selling and trading data has been a flashpoint in the privacy debate. Once a company gives away or sells a user’s data, it could go anywhere — and even if the company strips personally identifying information from that data, that’s still not reassuring to consumers. Many governments are demanding companies inform users of third-party data usage, and this alone is a major discouragement from doing so. It’s best to stay on the up-and-up, and only use location-based data in-house.

Consumers — and their governments — are waking up to the potential risks of sharing data with companies. As a retailer, you need to understand that gathering customers’ data is an issue of trust. By handling data — especially location-based data — ethically and responsibly, you’ll go a long way toward building a brand as a trustworthy, reliable company.


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