Building consumer trust online: Human-based elements are the most important to internet users

Building consumer trust online requires much more than good cybersecurity. We asked almost 1,000 web users in Canada how they protect their data and what gives them confidence in brands.

The twin forces of the internet and globalization have vastly expanded consumers’ choice in the past 20 years. We can now buy more-or-less anything from any country in the world, all from the comfort of our sofas —but there is a cost.

When interactions with brands take place remotely, using complex technologies that most people don’t fully understand, it can be hard to get a sense of what is trustworthy and what is not.

To help small to midsize enterprises understand what builds consumer trust, we surveyed nearly 1,000 web users in Canada. We asked them about their attitudes to sharing personal information online, how they gauge the trustworthiness of the brands they interact with, and what steps they take to protect their privacy when using the web.

In this article, we look at how consumers think and behave online as it relates to their privacy and explore how good (or bad) cybersecurity impacts consumer perception. In part two, we focus on how SMEs can build consumer trust online through good privacy practices and by establishing a reputation as safe, secure, and responsible brands. You can scroll down to the bottom of the article for a full methodology.

Do privacy policies play a role in building consumer trust online?

Perhaps unsurprisingly, web users in our survey are protective of their personal information. The majority (73%) said that their data privacy is very important, and another 24% said it was somewhat important. People also feel that the brands they use should handle this data with respect. 91% agreed with the idea that ‘The way a company treats my personal information reflects how they treat me as a customer.’

That said, it is not clear that web users always act to keep their information private. Many of them compromise their privacy to make their online experience easier. For example, while half (51%) said they would never share any of their personal information with a company they don’t trust, 43% said they would, as long as they benefit from sharing the personal information. These benefits may include receiving promotions, or the convenience of having an account with saved settings. Another 7% said they don’t even need to trust a company to hand over their personal information in any circumstances.

Given how important people say their data privacy is, few say they take the time to read companies’ data privacy policies every time they purchase a service or product. Only 12% say they always do this, 28% often, 44% sometimes, and 16% never.

Which industries are viewed as most trustworthy in the digital realm?

Respondents in our survey had clear views on which industries they think demonstrate good data protection and which industries they consider untrustworthy. They believe that privacy practices are best applied in the banking and finance, healthcare, and government sectors. But they trust advertising and marketing, media, and retail companies the least with their personal data.

Online advertising overall appears to be unpopular with the web users we surveyed. Readers may be familiar with the phenomenon of targeted ads, where we see banners for products on some websites that we have been looking at on completely unrelated sites. This can create an impression that we are being followed online, and it can be difficult for many web users to understand how this happens, ultimately damaging a company’s efforts in building consumer trust online.

88% of people in our survey said that they feel like companies collect too much of their personal data, which can manifest itself in these people seeing too much targeted advertising online. A majority (71%) said they don’t like this fact, while 17% don’t care about it. 

In addition, only 11% said they trust companies to collect personal information via cookies for commercial use. These uses could include the transfer of data to third parties or creating personality profiles, for example.

How online scams have played a role in consumer trust

Web users have good reason to be cautious about sharing their personal data, given the relatively high rate of problems they reported. 61% have experienced one of the forms of online scam, fraud, or data breach we asked about, with nearly one-third saying they had been victim of an online scam that resulted in either a fake product or never receiving a product.

The most common root cause of these incidents is phishing emails. In these attacks, criminals pose as a legitimate source (like a familiar online retailer) and send out mass emails asking people to click on links for seemingly innocent purposes, such as to confirm an order or update their contact details. Sometimes, clicking on attachments in these emails infects the recipient’s device with harmful malware that criminals can use to harvest more information. The scams may also direct users to an authentic-looking website, where they unwittingly hand over passwords and other sensitive data.

37% of those who had experienced an online incident said it came from a suspicious email, and nearly one-quarter (24%) said it happened because they were scammed when buying something on social media. Taking note of the origin of these scams is important, as building consumer trust online requires more than solely making efforts on a company’s website.

What makes a trustworthy online company?

Trust plays a major role in people’s choice of online brand, although it is lower in importance in consumers’ eyes than price, quality, refund options, and delivery speed.

That said, consumers do not have a single easy way to gauge how trustworthy a company is. They look at a variety of factors, with different characteristics being more important to some people than others. The most frequently used indicators are good reviews on review platforms (used by 55%), the ease of contacting customer support (51%), and recommendations from friends and family (46%).

Overall, consumers seem to associate higher levels of trust with other people— whether that is through reported experiences in the form of reviews or recommendations, or a real human point of contact at the brand they want to buy from.

How does trust impact business?

As well as understanding consumers’ attitudes about privacy, trust, and reputation online, SMEs need to understand how these translate into decisions that will affect their business.

First, the positive: respondents overwhelmingly prefer to buy from companies that have a reputation for protecting their customers’ personal information: 87% felt this way. Moreover, most of these respondents said they would be willing to pay a premium to deal with these companies. 24% would pay up to 5% more, and 29% would be prepared to go ever further, although 47% said they wouldn’t pay extra, implying that they consider good data protection to be a base-level requirement for any company that handles such information.

Conversely, there are several factors that could lead consumers to stop using a brand or take further action if that company behaved in untrustworthy or negligent ways with their data.

• 79% said they would consider switching brands if a company's data privacy policies are unclear.
• 59% would stop shopping with a brand if they knew that the company collected and sold their information.
• 36% would stop doing business altogether with (or buying from) a company that is the victim of a data leak. Another 30% would just sever their online ties with the company.
• 7% have already filed legal action against a company for a data leak/breach, and another 49% would consider it.
• 43% have stopped buying from a company that had a problem with its reputation for protecting customers' personal information.

SMEs should, of course, comply with the law and any sector-specific regulations regarding the handling of people’s personal data. As well as potential fines and criminal proceedings if they fail to meet these obligations, they risk damaging their reputation and their customer base if they are known to be negligent with important personal data.

In summary: web users value their personal data and trust brands to do the same

On the whole, web users in our survey consider data privacy to be important, and they acknowledge that brands may want to use that personal data to deliver services to them.

However, they are aware of the ways in which their data can be misused, too, and demand that companies treat their data with care. Many are willing to pay a premium for brands that can demonstrate higher commitment to data privacy.

In a world where trust can be hard to establish over an internet connection, consumers fall back on the information they get from other people. They tend to gauge the trustworthiness of a company based on the reported experiences of other people and value interactions with real humans.

In part two, we take a closer look at which measures companies can take towards building consumer trust online, as well as maintaining their image as a trustworthy brand.