In light of unwanted media attention stemming from the Cambridge Analytica data breach and a recently leaked memo which showcased the company’s aggressive growth strategies, Facebook has been working hard maintain stakeholder trust. Unhappy users have been spreading the #DeleteFacebook hashtag and shareholder trust has faltered, as has Facebook’s stock price.
At the core of Facebook’s challenges are questions about transparency and control. Companies, just like individuals, must build people’s trust by being upfront about their intentions and practices. When it comes to consumer privacy, brands must balance digital marketing strategies with respect for consumers’ personal lives and growing regulations.
As a general rule, leading with a clear purpose that benefits both your business and humanity is a powerful tool that can help navigate difficult business decisions. While the world’s largest social network is in the midst of a PR crisis, Facebook and Mark Zuckerberg made made purposeful changes that include its new mission statement, alterations to its algorithm and a policy change that stemmed from the Cambridge Analytica controversy, which restricts advertisers from coupling third-party data with Facebook data when targeting consumers. That said, Facebook’s struggles with privacy and consumer trust offer valuable lessons for all brands in the digital age.
Here’s how to build consumer trust and address consumer privacy
- Practice transparency:
In the age of programmatic advertising and targeted marketing, consumers aren’t surprised to seeing ads popping up based on previous interests they have shared. That’s not to say that people like corporations using their data to aggressively sell them products. In fact, a recent study showed that three quarters of consumers found personalized adverts to be “creepy.”
At this point, consumers are used to companies collecting and using their information; however, people feel invaded when they don’t know what information is being collected and how it’s being used. In the case of Facebook, consumer’s weren’t aware of how their information was being used or the manipulative attempt to influence their political decisions.
Since the data breach, Facebook claimed to have changed its policies to give consumers more control over the information by adding downloadable options and making privacy setting more explicit. The company is also changing its policies to make it harder for companies like Cambridge Analytica to use data in ways that contradict Facebook’s privacy rules. Stakeholder trust, however, is still low.
The key takeaway here is that it is better to be upfront about all the ways you are using people’s information and make it easy for them to control what they share, rather than backtrack and try to give people more control later.
- Maintain constant internal and external messaging:
Communication is a critical component of building your brand. It’s vital that your brand story is consistent no matter who you’re speaking to. While you may use a different voice when talking with shareholders than you would with customers, the meaning behind what you are saying should be the same. When messaging is inconsistent, you risk tarnishing your reputation and diminishing stakeholder trust.
Purpose acts as a compass for high level communication strategies that define the language used throughout your entire value chain, all the way from your code of conduct to employee engagement to marketing. The recently leaked 2016 memo alluded that Facebook was dedicated to connecting people no matter the cost, even if it had negative effects. While Zuckerberg has since changed the company’s mission statement from focusing on connecting people to “bring the world closer together,” the leaked memo is a pressing reminder of how important it is to be consistent with your intentions and messaging, both internally and externally.
- Align financial goals with brand purpose
To gain and maintain consumer trust and goodwill you must connect the success of your business with what’s best for your customers, your bottom line, and your purpose-driven mission. This is not the first time Facebook has struggled with privacy issues. The social media behemoth has been apologizing for how it utilizes consumer data for over a decade. Although Facebook responded to the Cambridge Analytica scandal with policy changes, the General Data Protection Regulation, an EU law that gives consumers the “Right to be Forgotten” and the “Right to Access,” is essentially forcing Facebook to give consumers more control over their data, which could hurt the company’s bottom line.
While Facebook has been making clear efforts to redefine its purpose, not only with it’s new mission statement, but also alterations to its algorithm that prioritize friends over ads, the company is juggling what’s best for its users and what’s best for the short term gain of its shareholders. At the end of the day, consumer adoption is key to the financial success of every company. While the social media platform has over 2 billion members, Facebook saw a reduction in daily active users in Q4 of 2017. It’s timely reminder that what’s best for consumers is best for your bottomline and the long term success of your business.
The key learning here is that accountability, transparency and consistency are paramount to building consumer trust. By crafting your corporate strategy around a higher purpose, you can guide product design, internal operations and marketing initiatives with clarity. Consequentially, instead of your brand success coming at a personal cost to consumers, purposeful leadership can inspire them to build your business with you.