Because so many customers are adopting the Web to transact business, e-commerce is exploding.
Online sales to consumers is projected to reach $184 billion in 2004. Business-to-business online sales will grow at an even faster rate, and are expected to pass the consumer e-market at about that same time.
Customer loyalty and satisfaction will be the differentiating factors between successful and unsuccessful online initiatives. If you're one of the many marketers hoping to move customers to the Web (after all, it's clearly the most cost-effective way to enable many sales, marketing and support activities), there are some truths about the e-world that you need to know.
Information is the key ingredient of excellent customer experiences on the Web. In lieu of direct interactions, data collected online will help you understand your customers' needs, target and personalize interactions, and customize product and service offerings.
Currently, however, some customers have relatively low confidence in doing business on the Web. They're particularly fearful of sharing their personal data because of concerns about fraud, misuse of their financial information, identity theft and invasive marketing.
Indeed, much more information about consumers is collected and seemingly available to more people at a much faster rate. In addition, such information often is stored in databases that are connected to the Internet, making it, in theory, easier for thieves and hackers to get their hands on the data.
I believe this puts e-commerce at a critical juncture. Information is its lifeblood, but the most successful companies will be those that earn customer trust. Only then will customers share their information.
Bob Dorf, president of Peppers and Rogers Group, notes: "Privacy is the single greatest threat to the successful implementation of one-to-one. Any company that is going to do [one-to-one marketing] and not totally respect the privacy of the customer's information is just waiting for disaster … begging for a disaster."
Indeed, surveys show that almost 40 percent of users who bought online last year agree that privacy concerns kept them from shopping again, and nearly 60 percent express concerns about companies selling their information to third-parties.
I strongly disagree with the well-known Silicon Valley executive who told consumers last year they have no privacy rights and they should "Get over it."
Rather, I say privacy concerns are not going away, so e-commerce companies should get over that!
All this privacy frenzy makes governments nervous—and that should make us, as marketers, nervous. We must take steps to slow down a legislative push that could significantly restrict our ability to conduct business online.
If you're serious about doing some or all of your business transactions on the Web, you have a golden opportunity to make customer privacy part of your brand image and your strategy for building customer loyalty.
Try to demystify the subject. Privacy is about an individual's right to have his or her personally identifiable data protected, whether at home or at work. It applies to all the data you collect about your customers on and off the Web.
Following are a few simple basics:
• Awareness is telling the truth about what customer information you collect, why you collect it and who you let use it. Note that your internal practices must match your policy.
• Accuracy and access refer to letting customers review and correct their data. This can be a great opportunity to have your customers help you maintain your database. If you don't yet have online access to your customer data, a printed report (like the credit bureaus have used for years) could work well.
• Security refers to keeping customer information safe from anyone with whom you have not planned and disclosed to share it. It involves finding the right products and technology and using them. For instance, don't turn off your network firewall because you know you plan to log on remotely while on vacation.
• Oversight refers to giving your customers an option to contact an independent party if they feel their privacy rights were abused. There are third-party privacy seal programs, such as the BBBOnline's (subsidiary of the Better Business Bureau) Privacy Seal, that offer policy review and safe harbor dispute resolution. BBBOnline is working with government and consumer organizations around the world to develop a global safe-harbor network and co-branded seals.
To do business in the 21st century, you need to realize that customer privacy is a real issue. Use it to your company's advantage by taking the following recommended steps:
• Understand what customer privacy is about (remember, it's not rocket science).
• Get a privacy seal. Use simple and consistent language to describe what you do.
• Take responsibility and demonstrate leadership. Let your customers know that you accept the responsibility of protecting their personally identifiable information as you would the credit cards in your own wallet.
• Help lead the charge in building awareness and educating the marketplace. Make your efforts visible.
Judy Kincaid is president of JK Associates, a consulting firm that helps companies invest in improving the experience of their customers through their efforts to design, build, manage and protect their customer information assets. You can reach her at (650) 838-9816, or by e-mail at firstname.lastname@example.org.