Why having a Privacy Policy on your website can help increase the trust of your customers

Does anyone actually read Privacy Policies? Do your customers really care if you have a Privacy Policy on your website? Would potential customers not do business with you if you don’t have a Privacy Policy. If you were to ask these questions before 2018, the answer would have been a resounding “no”. However, ever since the Cambridge Analytica scandal and the implementation of Europe’s privacy law, the General Data Protection Regulation (GDPR), the answer to these questions has changed to a strong “yes”. 

The fact is that consumers now care about the collection, use and disclosure of their personal information online, support privacy laws and are unafraid of leaving platforms and companies that do not respect their privacy. This is a big change for website operators and how you need to approach and prioritise privacy compliance. In this article, we will discuss why having a Privacy Policy can increase the trust of your customers, including: 

  1. The new consumer views towards privacy; 
  2. Why resolving consumer concerns helps build trust; 
  3. Why complying with privacy laws helps build trust; and 
  4. How that trust benefits you. 

The new consumer views towards privacy 

There has always been a small minority of consumers who were concerned about how companies collect, use and disclose their personal information. 2018 was the year that brought privacy into the mainstream. In early 2018, the Cambridge Analytica scandal broke. It was revealed that millions of Facebook users had their personal information harvested without their consent by Cambridge Analytica, who then used that information predominantly for political advertising. This clear invasion of privacy upset many consumers and spurred them to contact their government representatives and ask them to create privacy laws that would shed light on how companies collect, use and disclose personal information online and prevent future privacy abuses. In fact, so many consumers have requested the passage of these privacy laws, that there are now 23 proposed privacy bills in the United States. 

Here are some interesting statistics on how much consumers value privacy: 

  • 84% of respondents said that they are open to new state privacy laws ( KPMG study ); 
  • 91% of respondents said that the right to delete personal information and know how their personal information is used should extend to all US citizens ( KPMG study ); 
  • 52% of Americans will not use products or services that they believe have privacy issues ( Pew Research study ); and 
  • Privacy concerns are having a major impact on people’s online behavior ( Amnesty International study ). 

It is clear that the protection of one’s privacy is no longer a fringe interest - privacy is valued by most American consumers, including your customers. 

Why resolving consumer concerns about privacy helps build trust 

As a consumer yourself, you probably would not shop in a store where the shopkeeper steals your change. Trusting the personal that you are buying from is a big deal to consumers - and can be a determining factor when making the purchasing decision. A big part of building trust with consumers is hearing and alleviating their concerns. A great example of this is offering and honoring replacements for items that are damaged during shipping - it encourages people to buy by establishing that they will receive the item that they ordered in good condition. The same goes for privacy. 

As discussed above, privacy is now a major concern for consumers, a concern that can impact their decision-making as to who to do business with. To alleviate this concern and therefore build trust, you should: 

  • Acknowledge and understand that consumers have a valid concern about the privacy of their personal information online; and 
  • Demonstrate that you care about this concern by having a Privacy Policy that complies with privacy laws and explains how you collect, use and disclose personal information. 

Why complying with privacy laws helps build trust 

Have you ever eaten at a restaurant that’s received a “D” evaluation from the Health Inspector? Or one where people were sickened with salmonella the night before? Most of us would avoid such restaurants because we do not trust that they are clean or safe enough to eat there due to the lax following of food safety laws. The same is true for websites and privacy - consumers want to know that you are following the law. There are several privacy laws that are in place in the United States and abroad and govern certain websites that collect personal information (e.g. through contact forms or through newsletter sign up forms). Privacy laws are unique in the sense that they protect consumers, not businesses. This means that privacy laws can apply to businesses outside of the state or country in which they were passed. Having a Privacy Policy, as required by these laws demonstrates that you are willing to follow the laws, thereby building trust. On the other hand, failing to have a compliant Privacy Policy can lead to heavy penalties and fines of $2,500 per violation (per website visitor), up to €20,000,000 in total. 

How consumer trust benefits you 

While trust is a great thing in and of itself, it is important to note that consumer trust and a modest investment into privacy can have many benefits: 

  • Prevents customers from leaving your website and buying from a competitor who does take privacy seriously; 
  • Investing in privacy has shown to lead to shorter sales delays and higher financial returns ( Cisco study ); and 
  • Answering questions about your privacy practices in your Privacy Policy can help reduce customer support requests and complaints. 

Privacy abuses have been a major public relations issue for many companies, large and small. You do not want that to become the defining feature of your company when it is so easy to respect privacy and consumer concerns regarding privacy. 

Consumer trust is vital for any business, especially for small ones. It can make or break your sales goals, can make working in your business enjoyable or a drag, and can propel you to new heights or shut you down completely. Respecting consumer privacy by having a compliant Privacy Policy can go a long way with consumers, especially now that they are focused on ensuring that their personal information stays private. 

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