Data privacy is a hot topic in the news, with frequent reports of hacked databases, stolen social media profile data, and not-so-secret government surveillance programs. This has led to a growing awareness of the importance of data privacy among the public. As consumers have become more aware of their data rights, they have also become more mindful of the brands they buy from.
A recent survey found that 90 percent of customers consider data security before spending on products or services offered by a company. People who care about data privacy are more likely to switch brands if they feel their data may be at risk.
But what does this mean for businesses? How does it affect their bottom line?
This article tells how data privacy concerns impact a consumers' purchase decision.
How Consumers Make Decisions
Every day, we all face choices — what to eat for breakfast, which career path to pursue, and how to spend our vacation. To make informed decisions, we research the facts, weigh the pros and cons, and consider the possible outcomes.
The same applies to your customers. The traditional buying process has five stages: awareness, information search, evaluation, purchase, and post-purchase evaluation.
- First of all, the consumer identifies the need.
- Next, they search for information about the available solutions to their problem. This may include looking up your company online, asking friends and family members, reading reviews on websites and magazines, etc.
- Once the customer finds all the information they need, they compare various products and services. If multiple brands are similar in price and quality (and if the consumer has enough time/money), this step may involve more research into specific brands and models.
- Finally, the consumer makes a purchase decision and either buys from you or from a similar business.
- The buyer decides whether the product is worth it.
Nowadays, privacy concerns considerably affect the consumer's purchase decision process. 71% of consumers said they would be less likely to buy from a company if they knew it shared their personal information with third parties without their consent.
In the same study, 87% of consumers would stop using a service or brand if they have concerns about its security practices.
Hence, if you fail to ensure data privacy at any stage of the purchase decision process, you are very likely to lose potential and existing buyers.
What this means for your business is that you must give customers full transparency when it comes to how you collect and use their personal information to maintain their trust and loyalty.
Align Marketing with the Consumer Decision Journey to Power Both
The consumer decision journey is a roadmap that helps marketers understand how consumers decide where they want to spend their money. It describes how consumers move through the different stages of the buying process, from awareness to purchase.
Both marketing and the customer decision journey share one common goal – to bring customers to your business and encourage them to purchase. Individually, neither marketing nor the customer journey would fully achieve the company's goals. But when aligned, they show outstanding results.
There are five ways marketers can align their efforts with the consumers' decision-making process as outlined below:
Prioritize Objectives and Spending
Marketers need to prioritize their objectives and spending based on the customer's purchase decision-making process. Suppose the customer is not at the consideration stage yet, and your marketing goal is to increase brand awareness. In that case, it makes more sense to focus on paid search advertising or social media ads.
On the other hand, if they're further along in the process and you want to increase brand preference or purchase intent, you should invest more in content or influencer marketing.
A consumer-driven marketing approach enables you to create a strategy, messages, and tactics based on the findings from your customer research. You can also use the insights from monitoring how people interact with your brand online and offline.
Using smart data analytics tools and predictive algorithms lets you understand how specific target audiences behave over time and use this knowledge to improve engagement. This will help you identify where they are in their decision journey and tailor your message accordingly.
Merchandising and Packaging
Packaging catches our eye and makes us pick up a product and read its label. Merchandising (in this context) is how we get the product from the shelf to our hands. If your packaging doesn't catch the buyer's eye, or if it's not easy to find, you could miss out on a sale.
Tailored messaging (personalized content) is one of the most critical factors of purchase decision.
Businesses can personalize their messages through various channels, including direct mail. Direct mail marketing can be a powerful way to reach customers at their homes and offices. Whatever other marketing channels can do - create brand awareness, trigger a sense of urgency, boost sales & conversions - you name it, can be done through direct mail marketing campaigns.
The benefits of direct mail marketing don't end here. Your direct mail marketing campaigns can help your sales and marketing teams collect more data about your customers with technology and automation. But remember to keep data privacy laws in mind to prevent legal action against your business.
Mind the Importance of Pricing in the Consumer Buying Process
Often we pick up a good-looking, well-packaged product only to put it back on the shelf quickly after looking at its price tag. Pricing is one factor that affects the consumer purchase decision-making process.
Pricing also impacts how consumers feel about your brand. If you charge too much for something, consumers may not feel good about your products. 90% of people would switch brands if they found a better deal elsewhere.
If you charge too little, consumers might think your products are cheap or inferior, and some won't buy from you again.
The key is to set the price just right – not too high and not too low. This way, you can attract your target customers and boost sales.
Ensure Data Privacy to Make People Convert
Customer dissatisfaction is one of the factors of post-purchase decision, and breached data has a lot to do with it. Let's face it. Nobody likes it when you share their data without their consent.
Over the past few years, companies have been hit with fines, lost customers, and damaged reputations after mishandling or misusing customer data. The most recent controversies involving Facebook and Cambridge Analytica have made it clear that consumers are increasingly concerned about how companies use their data.
But data privacy isn't just about protecting yourself from regulators and angry customers. Implementing strict data protection policies presents an opportunity for your businesses to stand out from the crowd.
That said, here are three ways data privacy can help drive your business:
- Data privacy grants your business a competitive advantage over other rivals who aren't much bothered to protect their customers' data.
- Data privacy offers individual customers more control over how their data is used and how long it's stored.
- Increase customer trust and loyalty by showing them that you care about their personal information.
No matter how you choose to engage customers and influence their purchase decision process, you mustn't overlook the importance of data privacy.
If, for example, you want to focus on personalized messaging and choose direct mail marketing as your primary medium, be sure to work with a partner who is always conscious of customer data. One good option is Inkit Send direct mail automation tool.
Inkit takes a holistic approach to data privacy, security, and compliance. We built our platform on the foundation of GDPR and ISO 27001 standards.
We strictly adhere to these standards, ensuring that we can provide you with the highest level of security and confidence regarding how we store your customers' personal information.
When consumers are faced with a data breach, their purchase decision changes significantly. Because of this, businesses looking for how to get a good decision face purchase product should consider how they collect, use, and store customers' personal information.