Digital transparency can sometimes boost consumer distrust

General provisions on the protection of personal data (GDPR) implemented in the European Union since May 2018 has introduced a significant change in the culture of companies in terms of their data practices, imposing recent ethical, responsible and clear requirements.

The goal was to protect consumers by informing them about the tools, practices, and technologies used by organizations that are generally hidden to users (data collection, algorithms, ad targeting, tracking, etc.). Companies typically keep customers in the shadowy and provide transparency around digital practices.

But does this transparency reassure the consumer? The answer is less plain than it seems. Indeed, A test which we conducted on a group of 445 consumers confirms that, of course, too little transparency raises suspicions. However, our results also show that transparency has a negative impact on trust above a certain threshold.

Filter your mind

This can be explained by several reasons. Let’s first take the example of a vehicle recall carried out by a manufacturer, because it presents aspects that threaten driver safety. In this situation, does a vehicle recall inspire trust among individuals or, on the contrary, does it inspire suspicion, suspicion, distrust regarding the quality of the product? Being clear with customers about digital practices and elements related to the security of their personal data can therefore give rise to negative feelings towards the company.

Explaining marketing processes raises suspicion and distrust among customers who certainly had no idea of ​​the scale of digital practices. Finally, explaining your actions signals a form of risk. Not “saying anything” about the brand may suggest that it scrupulously complies with the regulations and standards in force in this field (e.g. GDPR). On the other hand, talking about the actions and measures taken in the field of personal data protection may raise suspicion. As the CEO of the Synox Group, a specialist in connected objects, told us:

“If a company says too much, customers feel like they’re trying to justify themselves and therefore give the opposite impression. They lose confidence. If a company has nothing to be ashamed of, it doesn’t have to say so much. Saying too much causes a loss of clarity. The customer no longer knows how to analyze if they say too much; they may not be able to absorb the information.”

Moreover, it turns out that customers are subjected to complicated psychological mechanisms and cognitive shortcuts in order to respond automatically, intuitively, and quickly to the demands of their environment. This is about bounded rationality. For example, during a shopping journey, a customer may employ mental framing (partial evaluation), reductionism, or focused selection when evaluating a company.

Unconsciously, he applies a mental filter that causes him to ignore a certain amount of information that the company discloses. This may explain why even if the company is clear, it does not improve trust; customers rely on negative prejudices related to a generalized distrust of digital practices.

Finally, brand transparency is not something that consumers can easily verify. It is therefore insufficient. Being clear can even be threatening if a brand does not give its customers the ability to control that transparency. “Knowledge” itself has mixed effects on removing the feeling of helplessness of individuals. Without ensuring control over dataTransparency can therefore be counterproductive and therefore negatively impact trust. Information is good. Providing the means to regain control over data is much better.

More pedagogy

To find the right balance between too much and too little transparency, brands can consider very specific actions. For example, online retail giant Amazon offers verified reviews that highlight the origin and details of customer reviews (the product purchased and the date of purchase). Or, for example, companies could include a link to a returns policy and process (ideally as plain as possible) on each product page.

Companies already have to be more accountable to consumers when it comes to managing personal data, due to GDPR and recent professional conventions. However, they could do this in a more comprehensive and educational way, for example by using plain videos and visual content. Brands need to promote the specific benefits of collecting and using personal data, rather than explaining complicated data processing. Be clear, yes, but also be clear about what is expected of consumers!

Finally, it would be a matter of encouraging brands to work together by ensuring that more responsible practices are developed. The idea is to re-invent the social contract so that it seems more fair to consumers, which could then benefit brands in terms of their relationships with customers. Public policy actions can be implemented to this end. For example, the state is currently working at national level on inclusive digital technology. Such initiatives allow consumers to have more control over their environment, reduce their perceived vulnerability and thus strengthen their trust in brands.