RealTime IT News

Clicking on Trust

Companies' privacy policies and reputations are the two biggest influences on consumer trust when providing personal information online. That is the major conclusion of a recent study just released by Vancouver-based Internet solutions provider Columbus Group and Canadian market research firm Ipsos-Reid.

Although the study took a look at Canadian Internet users, it is fair to say that the results can also be of help to companies outside of Canada.

One of the interesting results of the study is that a fairly large number of Internet users, 82%, said that they ey had provided personal information to a Web site. However, among those who have shared personal information with Web sites, the reasons for doing so are varied.

For example, 62% have completed site registration forms to access premium content, 57% have entered personal information for purchasing goods or services, and 55% have provided online contest entries.

The study also found that there are definite reasons why Internet users are more likely to submit information at one site and not another. For example, 74% indicate the company's reputation made them feel more comfortable with providing this information, and 55% claim the stated privacy policy - a statement posted on the site that explains the company's intended use of submitted information - made them more comfortable with providing personal information.

"At this stage of the game, having a clear privacy policy in place is a competitive advantage," says Chris Ferneyhough, Vice President of Technology Research at Ipsos Reid. "Firms that have recognized this are enjoying the benefits of having more information on their current and potential customers. Organization that have not yet recognized the importance of a clear privacy policy are shooting themselves in the foot and are hindering their efforts to reach potential customers."

The study also found that a privacy policy is the leading opportunity for a company to build trust with Internet users that have never felt comfortable with providing personal information online. A total of 57% of users who have never submitted personal information online state that a solid online privacy policy would most likely make them reconsider sharing personal information, while 53% state that the company's reputation would also influence their decision.

However, the study did not just reveal positive information. The Columbus Group/Ipsos Reid study also found that as more Web sites are gathering information from users, the misuse of this information is becoming more apparent.

According to a survey in the study, 18% of Internet users who have shared personal information claim to have experienced a breach of their online privacy ranging from unwanted e-mail marketing to the transfer of their information to a third party.

Columbus Group's Privacy Advisor Christopher Burke is encouraged by the findings. "For e-business to succeed, companies have to establish trusting relationships with their online customers. This survey has provided us with more evidence that online privacy concerns can be mitigated though clear and open communication," says Burke.