In the New Data Economy, Trust is the Ultimate Currency

The Facebook consumer privacy scandal has focused attention on the importance of trust.

Mark Zuckerberg’s recent appearance before congressional investigators probing the Facebook user data scandal has highlighted the trust chasm that has opened up between consumers and some of the biggest brands in the Internet era.

As a result, we have reached an inflection point in the debate over consumer data privacy and regulation in the U.S. that could have far reaching consequences not only for consumer brands, but also for the technology companies that provide the tools that brand leaders use to manage the customer experience.

The implications of this trust deficit were reflected in the comments of Rep. Michael Doyle, a Democrat from Pennsylvania, who told the Facebook CEO during one exchange: “To my mind, the only way we will close the trust gap is through legislation that creates and empowers a sufficiently (powerful) oversight agency with rule-making authority to protect the digital privacy and ensure that companies protect our users data.”

Ramming home his point, Rep. Doyle added, “Why should we trust you to follow through on these promises when you have demonstrated that you’re willing to flaunt your internal policies and government oversight when the need suits you?”

Zuckerberg had no real answer.

Consumers want a personalized, customized experience online, but not at any cost

At the root of the problem are what might be called the “terms of trust.” Consumers want a personalized, customized experience online, but not at any cost. Consumers will share information about themselves in return for something — better products and better services. But they will only do that if they can control and understand what’s happening with their data. This is what is technically thought of as consent.

“We are moving to a world where data is probably the most valuable asset, but trust is the ultimate currency in this new data economy,” says Patrick Salyer, CEO of Gigya, recently acquired by SAP. Salyer argues that over the past decade, brands have delivered on personalization, but that at some point a line was crossed.

“They began tracking people without their permission and creepy things were happening,” he says. “Their data was being sold without their knowledge. Ultimately, all of this has eroded consumer trust.”

In fact, a recent survey suggested that two-thirds of consumers don’t trust brands anymore.

“Consumers still want personalization,” Salyer says. “I don’t think that’s something they want to move away from, but transparency and control around their data is becoming critical.“

Salyer argues that the European General Data Protection Regulation (GDPR) that go into effect next month — and which some consider a possible model for U.S. regulation — are a symptom or a response to what consumers are feeling: “Usually you see regulation getting too far ahead of things, I think this is regulation actually following what consumers want.”

More generally he and other privacy experts argue that it is no longer acceptable for brands to assume they have permission to use customer data, they need to actively ask for consent. That means rethinking the technologies underpinning both the customer experience and the role of customer relationship management (CRM) software.

As Salyer notes: “Trust is everything. The next leading brands will be the most trusted brands.”