February 27th, 2014 by Maria Minsker

A few weeks ago, I had the pleasure of stumbling into ChikaLicious Dessert Club on 10th Street between 1st and 2nd Avenues in New York City. What drew me in, aside from the intoxicating smell of their doughssants (Google it), was the massive crowd. Lined up out the door, this crowd wasn’t just there for the doughssants though — they were there for free doughssants.  As I quickly found out, PayPal had set up shop inside the tiny (tiny!) dessert spot to promote their app, which allows users to check into a location and pay for purchases with their mobile devices. Not only that, but PayPal was also touting their “Offers” feature, which uses consumers’ physical location to track down coupons and offers at nearby locations. I heard from a man on line behind me that just a over a week ago, PayPal was offering a $10 coupon to ChikaLicious customers. On the day I stopped by, it was a $20 coupon.

One after the other, customers downloaded the app, gave the app permission to access their location, checked in, and snagged the coupon, showing it to the cashier at the register to pay. No one, myself included, seemed to give a single thought to the fact that we were giving up a pretty valuable piece of our privacy for a free dessert. Was it worth it? (Don’t answer that until you’ve had a doughssant from ChikaLicious!) In all seriousness though, the transaction left me wondering.

Just yesterday, SDL, a global customer experience management provider, released the findings of their privacy and data study, which revealed some surprising results. According to the study, only 44 percent of US consumers would be willing to give up personal information for free products and services. Perhaps even more shockingly, 82 percent of US consumers say they’re not comfortable with businesses tracking their check-ins or in store activities. On the flip side though, when asked whether they use “Do Not Track” or “Incognito” features on their devices, 71 percent of US consumers said they never use the features, or do so very rarely. Similarly, when asked whether they read the privacy policies on different websites, 63 percent said no.

So where does this logic gap stem from, and what was the point of my PayPal story? As the big data explosion continues to, well, explode, brands are constantly looking for ways to harness more and more consumer data. Yet they’re also constantly faced with the question of how far they can push consumers. The glue that holds this big data balancing act together, it seems, is trust. Consumers will never be comfortable with giving up private information, and who can blame them? That’s why, in theory, most oppose the idea of, say, “checking in” to a restaurant to score free food. In practice though, many will do it anyway. Why? Because despite skepticism, consumers trust brands that don’t wrong them.

SDL’s study showed 80 percent of US consumers are more likely to provide information to a brand they trust. PayPal, a well-recognized, veteran player in the e-commerce space, was deemed trustworthy by ChikaLicious’ customers, and while there’s always risk involved, the customers decided that, in this case, the reward was worth the risk. Would the outcome have been different if it were some other, lesser-known, company offering the promotion? Maybe. Ultimately, all brands can do is protect the information they’re privileged to collect, and use it to make customers’ experiences better. If they can deliver on that, the trust will come, and with it, the data.

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