Want Consumer Data? Earn Consumers' Trust

BOSTON, MA--(Marketwired - Nov 6, 2013) - Big data has the potential to increase revenues, market share, and margins, but most of these opportunities require the use of sensitive consumer information. Organizations that create trust regarding their use of such information should be able to increase the amount of consumer data they can access by at least five to ten times in most countries, The Boston Consulting Group (BCG) estimates in a new report, The Trust Advantage: How to Win with Big Data, being released today. The resulting torrent of newly available data could shift market shares and accelerate innovation. This performance boost represents what BCG calls the "trust advantage."

"Unlocking value from big data has generated a great deal of buzz in the C-suite," says John Rose, a senior partner and the report's lead author. "But often left out of the discussion is how to gain access to the information -- much of it sensitive personal data about real people -- in the first place."

Without consumer trust in how this information is used, most of the trillions of dollars of social and economic value promised from big data will not be realized. In fact, the report estimates that two-thirds of the total value potential stands to be lost if stakeholders fail to establish a trusted flow of personal data.

To help organizations develop differentiated strategies for navigating the landscape of trust in the age of big data, BCG surveyed nearly 10,000 consumers 18 years and older in 12 developed and developing countries on the topic, as part of its larger 2013 Global Consumer Sentiment Survey. Among the top findings:

• Companies' starting point matters. Consumers are more than twice as concerned about the practices of financial institutions, social-media and search-engines companies, and government entities than they are about those of branded manufacturers, carmakers, airlines and hotels, cable providers, and retailers that offer loyalty cards.
  
  
• Consumers want data privacy. For 75 percent of consumers in most countries, the privacy of personal data remains a top issue. Citizens of all the countries surveyed consider credit card information, financial data, information about children, and health and genetic information to be the most sensitive.
  
  
• Millennials are no less private online than other generations. Seventy-one percent of younger Millennials (those aged 18 to 24) in the U.S., for example, report that one should be cautious about sharing personal information online. While this level of concern is lower than that of other generations, it is still remarkably high, and in a range consistent with other generations.
  
  
• Consumers are willing to allow the use of personal data for multiple purposes if, and only if, organizations are careful stewards of this information. An average of only 7 percent of global consumers reported that they are comfortable with information about them being used outside of the original purpose for which it was gathered. This changes to 54 percent if they trust that other uses will not embarrass them, damage their interests, or otherwise harm them.
  
  

For global organizations to ensure that they have the greatest possible access to data about people, consumers will need to trust that information about them will be well stewarded, the report concludes. Stewardship means that data will be used for the purposes allowed -- and only for those purposes. Trust remains particularly elusive, as exemplified by the reaction to disclosures about the U.S. National Security Agency's extensive monitoring of communications to fight terrorists. The intense response was due to concerns that the data gathered would be used for other purposes -- or, in other words, because of a lack of trust in the NSA's data stewardship.

The report identifies a set of actions that organizations must take to create a trust advantage:

• First, they must create principles, codes of conduct, compliance mechanisms, and trust metrics to master data stewardship.
  
  
• Next, they should engage consumers by communicating transparently, clearly, and succinctly about how personal data will be stewarded and used and how the organization rates itself on its own trust metrics.
  
  

"Responsible data stewardship confers critical performance and brand advantages, as well as reduces risk," says Christine Barton, a partner and report coauthor. "Brands gain because they become perceived as being more transparent and more socially responsible, values that are increasingly important to global consumers and particularly the Millennial generation."

A copy of the report can be downloaded at www.bcgperspectives.com.

To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or gregoire.eric@bcg.com.

About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 78 offices in 43 countries. For more information, please visit bcg.com.

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About BCG's Center for Consumer and Customer Insight
The Boston Consulting Group's Center for Consumer and Customer Insight (CCCI) applies a unique, integrated approach that combines quantitative and qualitative consumer research with a deep understanding of business strategy and competitive dynamics. The center works closely with BCG's various practices to translate its insights into actionable strategies that lead to tangible economic impact for our clients. In the course of its work, the center has amassed a rich set of proprietary data on consumers from around the world, in both emerging and developed markets. The CCCI is sponsored by BCG's Marketing & Sales and Global Advantage practices. For more information, please visit here.