Consumers ditch websites with poor privacy policies

 

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By Stewart Mitchell

Posted on 18 Jan 2012 at 17:38

Websites need to rethink their privacy policies as consumers ditch those that hide data rules or leak information, according to research from Forrester.

The analyst found that a growing number of consumers were reading how companies dealt with their privacy and voting with their feet if they didn’t like what they saw.

“A leaky, bloated, or hidden privacy policy and/or terms-of-use statement will cost your organisation substantial revenues,” said report author Fatemeh Khatibloo.

“A surprising number of consumers ‘just say no’ if a privacy policy doesn't pass their sniff test, and the numbers seem to be rising.”

The research questioned 37,000 North American consumers, finding that older web users were most likely to read and act on privacy policies.

Most marketers can’t afford to lose valuable customer segments, but they are at risk of doing so if they retain the privacy policies they’ve been leaning on

In response to the question “Have you ever not completed an online transaction with a company because of something you read in the company’s terms of use or privacy policy?” more than half of respondents over 55 said they had.

The increase in awareness was illustrated by the fact that the same question posed to over 55s in 2008 saw only 40% of people ditch a transaction because of privacy concerns.

Overall, the number of people who had left a site due to privacy policy fears has risen from 38% to 44%, reflecting increased awareness over the last three years, Forrester said.

Although the walk-away rate was lower among younger web users, Forrester said companies and websites should be aware that these customers were likely to change their attitudes.

“Most marketers can’t afford to lose valuable customer segments, but they are at risk of doing so if they retain the privacy policies they’ve been leaning on for the past several years,” Khatibloo said.