Internet users are more likely to share personal information with a companies they trust. But how do businesses gain that trust? By clearly describing to their customers how exactly the company will use their personal information, according to a new Forrester Research report completed by data analytics provider Neustar.
As data breaches become more prevalent in the corporate world, the issue of data privacy and security becomes a more important one to tackle. Customers share personal information with various companies online, but more are becoming increasingly concerned with how that data is used and who it is shared with. Forrester surveyed 1,052 adults online - 62 percent of which said they are "not at all likely" to make a purchase from a company that shared their personal information with a data broker. Another 37 percent said they canceled a transaction after reading the company's terms of service.
The findings lead Forrester to conclude that "misuse and abuse of data will impact profitability," GigaOm reported. However, companies can turn their privacy policies into a marketing opportunity by responding to consumers' desires to have open, clear terms of service on their websites.
Some Terms of Service Are Long, Confusing
Some companies have very long terms, leading some online users to quickly hit the "I agree" button before actually reading through the policies. For example, the iTunes User Agreement is 14,500 words long, Fast Company reported. Facebook's is 4,490 words, which the source said will likely take someone the "better part of an hour" to read.
But like the Forrester study showed, a growing number of online users are uncomfortable with how their personal information is being used and resold by companies. And, this uneasiness is causing a surprising number of people to read through terms of service agreements - the Forrester study showed more than half of the respondents read privacy policies before making a purchase with a company - a fact Fast Company called the "most striking" finding in the new report.
Another interesting finding is that consumers are becoming more aware about how their personal data is being used - they know what information data brokers are most likely to go after and how much it costs. For instance, more hard-to-reach data like a person's hobbies, marital status and ethnicity is sold at higher prices than information such as a person's name and address, Fast Company reported.
Company data breaches can affect the business' reputation and cause customers to lose trust in the corporation. Along with having clear privacy policies on a website, a company would be smart to have proper data breach protection solutions in place to ensure customer information is kept secure.
Matt Cullina is chief executive officer of IDentity Theft 911.