Building Trust in an Online Environment

1. Building Trust in an Online Environment Angela D’Auria Stanton, Ph.D.

2. Building Trust is Critical • Marketers can build mutually valuable relationships with customers through a trust-based collaboration process. • The Trust Pyramid provides a framework for building trust. • You must establish Credibility to earn trust • The Value Exchange Process provides a framework for building deeper relationships once trust has been established.

3. According to www.consumerinternetbarometer.us • The percentage of Americans going online at least monthly has edged up to 67% today, compared to 64% at the end of 2005. • While usage continues to increase, trust levels have not (only 27% of Americans fully trust the sites they visit). Bottom Line: The majority of consumers still don't fully trust that their personal information is secure.

4. What’s Important to Consumers? • Company’s products and services(77% USA – 74% EU) • Company’s treatment of customers(77% USA – 63% EU) • Honesty and ethics(62% USA – 48% EU) • Security provided to customers(33% USA – 39% EU) • Employee treatment(28% USA – 29% EU) • Environmental concerns(11% USA – 25% EU) • Social responsibility(11% USA – 17% EU) Source: http://www.clickz.com/showPage.html?page=3623088

5. The Key is Trust! • On the marketer side: • Marketers must give consumers compelling reasons to share the private information that drives many of the unique features of the Internet • On the consumer side: • There are many fears that translate into consumer risks • time risk • vendor risk • security risk • brand risk • privacy risk

8. Internet Fraud Safety Quiz

9. Trust The Trust Pyramid Differentiators Basic Building Blocks

10. Trust The Trust Pyramid Differentiators Consumer Collaboration Tone and Ambience Customer Control Fulfillment Basic Building Blocks State of the Art Security Merchant Legitimacy

11. State of the Art Security

13. Security: The 800 lb gorilla of reputation • 53% of U.S. consumers say a company has lost or compromised personal, financial or medical data • 60% have experienced computer security breaches, intrusion, hacking or other disruptions (e.g. viruses and spyware) at home • 43% have stopped a transaction when they began to question security Source: http://www.clickz.com/showPage.html?page=3623088

14. Trust The Trust Pyramid Differentiators Basic Building Blocks State of the Art Security Merchant Legitimacy

15. Merchant Legitimacy • Encourage prospects to sample your services through low-risk trials and creative offers. • Sell branded products or ally your product or service with an established brand

16. More examples of allying your product with an established brand. Even well known brands can benefit from this type of alliance or relationship.

17. Trust The Trust Pyramid Differentiators Fulfillment Basic Building Blocks State of the Art Security Merchant Legitimacy

18. Fulfillment • Problems: • frozen computers, lack of clarity about costs, lengthy registration processes, fighting to complete a transaction, etc. • Solutions: • Explain all costs, have an infrastructure that gets the right product to the right buyer in a reasonable period, and KISS. • 90% of Internet users expect companies to respond to questions submitted via websites within 24 hours and nearly 60% say they want a response in less than 8 hours.

19. Tips for lowering shopping cart abandonment rates • Remove most shopping navigation when a visitor enters “the cart” so they are not distracted from making a final purchase. • Leave customer service phone numbers, email, and IM abilities prominently on check out pages. • Instead of saying “buy now” on a product page button, say “add to cart.” • Buying is a bigger, harder decision than adding to cart. Start with the easy decision and build the sale from there.

20. Trust The Trust Pyramid Differentiators Tone and Ambience Fulfillment Basic Building Blocks State of the Art Security Merchant Legitimacy

21. Tone and Ambience

22. A recent study by the Persuasive Technology Lab of Stanford asked 1,500 active users of the web to rank items on a continuum.  • The credibility of a web site greatly increased with the following factors: • The site has proven useful to you before (2.0) • The site provides a quick response to your customer service questions (1.8) • The site has a clear connection to the world (1.7 - 1.5) and lists the organization's physical address, a contact phone number and an email address. • The site has been updated since your last visit (1.7) • The site looks professionally designed (1.5) • Extra features such as search capabilities and multilingual support (1.2 - .98) • The credibility of a web site decreased with the following factors: • The site makes it hard to distinguish ads from content (-1.9) • The site is rarely updated with new content.  (-1.7) • The site automatically pops up new windows with ads. (-1.6) • The site is difficult to navigate. (-1.4) • Technical problems such as broken links and typographical errors  (-1.4) http://www.webcredibility.org/guidelines/index.html

24. Trust The Trust Pyramid Differentiators Tone and Ambience Customer Control Fulfillment Basic Building Blocks State of the Art Security Merchant Legitimacy

25. Customer Control

30. Trust The Trust Pyramid Differentiators Consumer Collaboration Tone and Ambience Customer Control Fulfillment Basic Building Blocks State of the Art Security Merchant Legitimacy

31. Consumer Collaboration

32. The Value Exchange Process Stage 4: Trust-Based Collaboration Stage 3: Marketer-Driven Personalization Stage 2: User-Driven Personalization Stage 1: Attraction • Time and attention • Browsing and transaction information • “One size fits all” experiences • Performance information • Personalized experiences • Reactions and feedback • Tailored offers and recommend-ations • Sensitive preference information • Consultative problem solving and custom experiences CONSUMER GIVES CONSUMER GETS

33. Customer Respect Index (CRI) • The CRI based on: • Site Usability – How usable is the site to a wide range of users? This includes ease of use and accessibility • Communication – How willing is the company to engage in 1-on-1 communication to answer specific questions? • Trust – Can this site be trusted with your personal data? This includes transparency (clarity and comprehensiveness of privacy policies), Principles (respect for data privacy, cookie explanations) and Privacy (respect for data privacy, clarity and comprehensiveness of privacy policies) Source: The Customer Respect Group, September 2006

34. CRI 2006 Findings – Fortune 100 • Highest CRI Index: Intel, Sears Roebuck, HP, Medco and Proctor & Gamble • Fewer companies sharing personal data w/outside organizations • More than ½ continue to send unsolicited marketing e-mails to those who supply personal information for other reasons • 54% clearly explain their marketing opt-out or opt-in policies (52% do so for data sharing)

35. What is Privacy? • “The right to be left alone.” (Samuel Warren and Louis Brandeis, 1890) • Privacy is the interest that individuals have in sustaining a 'personal space', free from interference by other people and organizations (Roger Clarke, 1999) • The rights and responsibilities that govern the acquisition, disclosure and use of personal information (Off ice of Governmentwide Policy, General Services Administration, 1997)

36. Privacy Has Several Dimensions • Privacy of the person • Privacy of personal behavior • Privacy of personal communication • Privacy of personal data Information Privacy

37. The Current State of Online Privacy • Only 23% of companies had privacy policies that were considered “good” for allowing users to destroy their own information stored on corporate databases • Only 42% score “good” for their policies towards sharing of collected personal data • 72% scored “poor” for their policies towards re-using personal data for marketing purposes • 64% of companies now have privacy polices that scored “good” on clarity and are written for the customer Source: The Customer Respect Group Privacy Report

38. Intel Expedia E-Loan Verizon Wireless Estee Lauder (The Estee Lauder Companies Inc.) Marriott International, Inc. Con-Way Transportation Services, Inc. International Business Machines Corporation Medco Health Solutions Orbitz Top 10 Companies Rated for Privacy

39. Developing a Privacy Policy: Questions to be Addressed • What personal information do you collect from individuals? How do you collect it? Do you have different policies for online and offline data collection? • Why is the information collected and how is it used? Do you merge online and offline data? • Do you use cookies? For what purpose? • If you collect identifiable information online, can a visitor choose not to allow your use or transfer to a third-party to use in e-mail or postal mailings? How can a consumer exercise this choice? What choices do individuals have with regard to data collected offline?

40. Developing a Privacy Policy: Questions to be Addressed • Do you enhance data collected by you with third party data? If so, how and why? • With whom do you share data? Do you provide marketing for business partners to your customers? Do you allow third parties to collect personal information from your web site? • If you change your information policy, how will you let individuals know? • Do you allow individuals to access the information you have gathered about them and correct errors?

41. Developing a Privacy Policy: Questions to be Addressed • How do you secure personal information from unauthorized access? • How can individuals seek redress if you are perceived to have violated your own privacy policy? • What are the right messages for your customers? How do you tie your data collection and use practices to the provision of real value for your customers? • What laws or industry codes of conduct regulate your data collection use and practices? http://www.the-dma.org/privacy/privacypolicygenerator.shtml