Business needs to support the “Fair Data” mark to help build trust with consumers

As businesses devote their energies to collect and manipulate consumer data for competitive advantage there has not been an easy, instantly recognisable way to show that an organisation can be trusted to use personal data in an ethical way. In the main consumers tend to gravitate towards companies they trust. Having a recognised ethical mark would help consumers make their choices separating the trustworthy brands who share their values. 

“Trust and privacy are becoming major causes of concern and consumers are losing confidence that businesses will use their data for legitimate purposes” said Jane Frost chief executive at the Market Research Society recently.  She advocates for companies to get the “fair data” accreditation. www.fairdata.org.uk. Once obtained this accredited mark shows customers that the organisation is ethical, transparent and responsible.  To become accredited an organisation needs to abide by 10 Fair data principles , and in time it is hoped that the Fair Data mark will become as recognisable and trusted as the Fairtrade mark. 

Keep social media honest or consumers with boycott your brand

47% of consumers would be very likely to boycott a brand if they discovered it was operating unethically on social media, a YouGov survey commissioned by the Chartered Institute of Marketing (CIM) revealed recently. Over 50% of consumers said they had no awareness of brands using the following unethical behaviours on social media:

• Faking a review on a social media site.

• Purchasing followers, fans or connections on social media.

• Paying or incentivising customers to share positive messages on social media without this being made clear to other users.

• Paying someone to promote a brand, product or service within social media without disclosing the payment.

• Falsifying user-generated content (i.e. blog posts, blog comments, testimonials, reviews etc.).

63%of consumers have difficulty in knowing whether brands are using questionable methods on social media.

However, perhaps what is most interesting is the comment from CIM Director of Strategy and Insights “Of particular concern are the wide differences in opinion [between consumers and marketers] as to the sorts of activities considered ethically questionable and misleading, as opposed to acceptable and of no detriment to users. This means it’s not just those businesses intentionally misleading consumers that are the problem – even the most well-meaning brands might be pursuing

activities on social media without realising they’re contributing to a concern amongst consumers.”

In an attempt to address potential future problems the CIM commissioned the research with YouGov and produced a 10 point checklist of key things to consider. See www.keepsocialhonest.com for more details.

 

Is transparency enough when our behaviour is being influenced/manipulated?

There are big ethical questions to be answered around the use of big date and behaviour experiments.
Following the revelation that the dating agency OKCupid had experimented with putting the "wrong" people together last month, the OKCupid founder has stated "If you use the Internet you're the subject of hundreds of experiments at any given time, on every site. That's how websites work".  And yet OK Cupid's users have complained about the lack of transparency and abuse of trust. They clearly don't quite see it in the same way.

So, if an Internet site/brand is transparent about the fact that they are using your data to increase their sales is this sufficient to satisfy consumers and keep/regain their trust?. Behavioural expert Steve Martin has stated that if brands add value and act transparently, consumers are less likely to feel deceived. However, this is not how everyone sees it. Following the Facebook manipulation of data earlier in the summer a US senator has asked the Federal Trade Commission to investigate.

The three key tenants of this website have been the 3 Ts, that transparency and fair treatment help to build trust and boost value. What is perhaps missing in the arguments above is the fair treatment aspect. Being transparent is not enough on its own, it is also a question of being fair, and fairness in this context has to be what consumers consider is fair; this means asking them and taking proper note of their feedback and concerns. Without this the already poor levels of trust and confidence in business is going to dip further and that's not in anyone's interest.

Corporate responsibility an important business benefit

A survey produced by the marketing recruiter EMR reveals the importance of Corporate Social Responsibility (CSR) to business, helping to further the business case for organisations to have a broad stakeholder approach to value creation.

The EMR MD stated "a positive CSR image can be an immensely powerful tool in attracting, retaining and empowering the best talent...a good CSR can be the difference between landing the best employee and narrowly missing out", as 70% of respondents cited that CSR was a factor in deciding on their latest employer.

However, for an organisation to be seen to be really credible, genuine and believable in their corporate responsibility there has to be more than just a "positive image" as mentioned above. CSR and broader stakeholder commitment needs to be more than lip service or "greenwashing" to obtain good PR. The EMR research founds that firms in the FTSE 100 have increased their funding to CSR initiatives by on average 11% which is good news.  However the figures still don't prove that corporate responsibility has gone beyond the CSR department and is now a routine part of organisational culture which is really what society and the wider environment is now demanding . 

Stop, clean your hands and think afresh

Here's a link to my Thinkpiece published by the CII about duty of care in the insurance sector.
http://www.cii.co.uk/media/5490684/tp107_cork_clean_your_hands_25july2014.pdf

What's the purpose of business?

In today's business world there is a dominant view that  the purpose of business is to optimise shareholder return. But shareholdings were simply an innovative way of funding business expansion when family wealth and patronage were no longer sufficient to do this effectively, back in the pre-South Sea bubble days.The actual purpose of business was and still is to make or service something for customers and the success of this creates shareholder value as an important outcome/bi-product of the overall purpose.

The original social and community purpose of the banking industry has clearly been lost in recent years and so it's good to read today's report by the Thinktank Respublica called "Virtuous Banking."  It suggests, among other things, that the purpose of banking is to "ensure systematic prudential security, work for the prosperity of customers, promote the responsible creation of value". This focus on "responsible creation of value" is possibly an aspect that all businesses could aspire to. The report also calls for more shareholder activism in holding the Executive to account in achieving this purpose. If the suggested actions are adopted there is a chance that the banking industry could become a beacon of responsible business practice with public trust rebuilt. It's a long way off but quite an inspirational purpose.

Word-of-mouth grows revenue.

One of the business benefits of treating stakeholders fairly is it helps to engender genuine word-of-mouth (WOM) referrals and recommendations. The businesses which have WOM included as an important measurement in their organisation’s metrics are likely to be interested in recent research analysis by The Boston Consulting Group (BCG) which has concluded that, “The revenue growth of the brands with the highest advocacy levels is far above the industry average”.

The big question BCG asks however is how to drive brand advocacy and reach key influencers. "Innovative approaches, e.g. attempts to make the brand go viral and create a YouTube phenomenon have sometimes been successful but the commercial benefits have been less clear".

This suggests that these organisations are looking for the quick fix and short-term solution that can create a limited, but exciting, digital buzz. Perhaps one of the best ways to build sustainable, authentic and meaningful advocacy is through a solid strategic and cultural approach to fair treatment and transparency which over time will help to build trust.