Will contact tracing apps change the way consumers think about data value exchange?

Profile picture for user Jeff Titterton By Jeff Titterton July 29, 2020
With the rise of COVID-19 contact tracing apps, will consumers find more value in handing over their data? Zendesk's Jeff Titterton considers what this means for businesses

Smart phone running COVID-19 contact tracking app in city street © Maren Winter - shutterstock
(© Maren Winter - shutterstock)

From shopping apps to loyalty programs, people give companies their information constantly in exchange for a benefit, which can typically range from something simple like a discount to a better and more personalized experience. But as contact tracing apps now become the next tool in managing the COVID-19 pandemic, they represent a new, accelerated level of data sharing that citizens and customers are willing to engage in for a new value — personal safety.

With contact tracing apps, people are giving up personal health information for tangible benefits, both to help inform others of potential exposure and also in the belief that it could better ensure their own safety. In the case of government and hospitality-brand tracing apps, the tangible benefit could be the ability to travel for holidays or a more personalized shopping experience while social distancing. On the other end of the spectrum, some people would prefer to opt out of this sharing, are willing to pay a premium to companies who say they won't use customer data.

Now that data sharing — or protection — is so top of mind, it's important for brands to take a strategic approach to build trust and make the data value exchange clear to their customers.

Why do customers share their data?

There are some key considerations in customers' minds when it comes to sharing information. Each time a customer interacts with a company, they consider the risks and benefits of giving up their privacy. There are a few big reasons customers will give you data:

  • To get customized experiences

There's a paradox in data value exchange. People say they don't want to give up their information, except then you realize they actually expect you to have their information and use it to provide them better service. The average customer wants your app to be highly personalized in real time- they don't want to have to repeat information. They want to be able to have a continuous conversation with the company, with a brand, with a government. And they're very frustrated if that doesn't happen.

  • To get a discount

When it comes to offering a discount in exchange for data, there is definitely a benefit to the consumer. The company is saying, "We want to market to you and get you to buy more stuff." The benefit to you to give us that contact information is we are going to give you some money off your first purchase, or free shipping, or whatever the offer is. That works in the short term. In the long term, it's ideal if you can actually use the information to provide great service to the customer. That's what inspires customers to stay loyal to your company.

  • To see friends and feel safe

Data value exchange has a crucial role in the new contact tracing apps for the pandemic. For example, the Australian government created a smartphone app to help identify and alert people who might have been exposed. If you go into a restaurant there, you have to scan a QR code to show you were there, and if there's a Coronavirus exposure, they can track it.

Contract tracing apps like this have very high value to people, because it's a life or death issue. So they willingly give their data to ensure that they're protecting themselves and the people around them. In the case of contact tracing, I as a person am saying, "There's a lot of value to me here. I am going to be able to use this information to keep myself and my family and those around me safe, while being able to enjoy more."

Questions to ask as a company

We have an obligation to take care of our customers and protect their data. So when you're collecting customer information, there are things you have to consider.

  • How are you using the data?

When brands collect information about a customer, they need to make sure to ask themselves up front how they will use it for good. That's the real value exchange between a brand and a customer. You really don't want to have any gray area in how you're using customer data, because that becomes a trust issue. And this is especially important when it comes to guarding GDPR, because using data in a way the consumer didn't intend will break confidentiality.

Before they share anything, customers are going to ask themselves, "What's in it for me? Does the value I'm getting out of sharing my information outweigh the concern that my data will be misused?" The customer will consider whether they trust the company or government they're sharing information with. If there's trust, they'll be more comfortable.

  • Are you being transparent?

Is there clear language telling the consumer how their information is going to be used, and is there value to them in sharing it? If not, you risk frustrating your customers. I'll give an example. In the U.S. nonprofit sector, you make a donation to a cause. But sometimes buried in the fine print is language that allows them to sell your name to a bunch of other companies or a bunch of other nonprofits who then suddenly start marketing to you. That's a value mismatch. You gave your information specifically to support one organization, not so your name could be resold on the market.

  • Are you GDPR compliant?

It's super clear that contact tracing data should be used for this purpose only. And I think that the companies using these apps are, generally speaking, already doing this. To make this sort of data exchange work, companies need to make sure they're being very transparent with consumers about how they plan to use the information they collect. You should be very clear, because that is absolutely how trust is built or broken with customers.

At the core of data privacy is a value exchange

Consumers are more comfortable with less privacy if companies keep their needs in focus. The good news for companies is that providing a customer with a better experience often leads to more profit. A more personalized experience also leads to higher conversion rates. It leads to higher engagement, higher retention rates, and higher repeat purchase rates. So it pays off to put the customer first.