Speaking plainly and openly about privacy policy, asking only for the data that is necessary, and building a lasting relationship – these 3 elements are needed so that customers feel at ease about their privacy online, and companies obtain the consumer information they need to run their business.
Researchers from the Department of Marketing at Kozminski University analysed what the ideal transfer of personal data between internet users and brands should look like.
– When a company provides services over the internet, it enters into a kind of transaction with the customer – in exchange for access to their personal data, it offers a product or service the customer is looking for. It is natural that for a consumer to have fewer reservations about entrusting this type of information, they must trust the company and understand what data it needs and for what purpose – write Prof. Grzegorz Mazurek and Dr Karolina Malagocka of Kozminski University in the pages of "Business Horizons," published by the Kelley School of Business at Indiana University.
The three "T" tactic
The three "T" tactic
Based on an analysis of several dozen case studies and available research findings, the researchers created an original model showing that the process of sharing and acquiring personal data online can be comfortable for both sides.
– In the era of the digital economy, what is key is not the quantity of data but its quality. Our analyses show that three conditions most often need to be met for both sides of the market "deal," professionally called a "digital social contract," to feel satisfied. We have captured them in our original T-Form model. The three "t"s are Transparency, Type of data and Trust, that is transparency, type of data and trust – says Dr Karolina Malagocka, a lecturer on the MBA Digital Transformation programme at Kozminski University, who in July defended her doctorate on customer privacy in relationships with brands online, and combines her academic work with activity at one of the companies in the IT sector.
The researcher explains what the T-Form model means in practice: – Transparency is not only informing people about how data is used, but also a manner of communication that is free of specialist terminology. The language should be friendly, and consumers should be informed about how the brand processes data – she notes.
Communicate your privacy policy in a simple and clear way
Communicate simply and clearly
Example of a message:
"We need your data for purposes X and Y, but you can withdraw your consent to their processing at any time."
– It also happens that companies ask for data that is not necessary to provide the services, and any attempts to "extract" it act on customers like a red rag to a bull. If I want to buy something online, I will probably not refuse to give my email address, but questions about, for example, purchasing preferences may arouse suspicion about so-called profiling. This concerns the adequacy of the data collected – Malagocka continues.
Inform people what information the company collects and ask only for the necessary data
Ask only for the necessary data
How to build privacy boundaries online?
The T-Form model: how to build privacy boundaries online
Example of a message:
"To deliver the parcel, we only need your home address and phone number so the courier can contact you."
– In turn, a high level of trust significantly reduces customers' fears about disclosing their data. Both sides benefit: the company has the data it cares about, and the customer knows that thanks to this it can operate in line with their values – adds Dr Karolina Malagocka.
Build trust in the brand
Example of a message:
"We want you to feel comfortable giving us your data that is necessary to provide the services. Tell us how we can improve our privacy policy!"
A social contract based on mutual understanding
A contract based on mutual trust
According to Karolina Malagocka of Kozminski University, the skilful use of the three "T" tactic can make customers trust the company, while the company itself obtains good-quality data and permission to use it, for example to improve its offer or personalise communication. – The customer will then enter online relationships with such a company more boldly. In this way, social capital is built around digital services, which makes it possible to understand that the digital market does not "prey" on the customer and does not treat them as a product – the researcher emphasises.
– For the described transaction to take place, in exchange for access to private information the brand must offer attractive propositions and benefits. The contractual consideration is important here because its absence can lead to the loss of consumer loyalty to the company – Malagocka adds.
Summary
Researchers from the Department of Marketing at Kozminski University have developed the T-Form model, which is intended to make the comfortable transfer of personal data online easier for companies and customers. It is based on three pillars: transparency, type of data and trust. The researchers emphasise that what is key is the quality, not the quantity, of the information collected, and that privacy policy messages should be written in simple language, without professional jargon.
The model assumes that a company should ask only for the data necessary to provide the service and offer attractive benefits in return. As Dr Karolina Malagocka notes, trust reduces customers' fears, and its absence can lead to a loss of their loyalty. This approach builds social capital around digital services, showing that the market does not treat the customer as a product.
