The value of straight talking
If you're mainly used to treating customers as little more than a profit centre, get ready to improve your game. Although many customers aren't extremely picky about privacy-related issues, those who are can make a lot of trouble for you and your site's reputation if they're not satisfied.
The best way to avoid such problems is to be completely up front about what you want to do with their personal information, and make sure they know you're not hiding things from them. Give customers the option to interact anonymously with your Web site if it's possible, leaving the option that they provide more information later as they become more comfortable with your company.
Mobile service provider BlueSkyFrog, for one, has enjoyed considerable success with more than 300,000 opt-in customersâ€"20 percent of its subscriber baseâ€"specifically authorising the company and its partners to market to them via their mobiles.
Compare that response with the furore whenever a Web site is discovered to be making illicit use of customer information:
RealNetworks, for one, was pushed into a very public backdown after it was revealed that its software was sending it information about users' listening habits without their knowledge.
Privacy issues are a key part of US-based Fry's Electronics' deal to purchase bankrupt e-tailer Egghead.com, with Fry's reserving the right to back out of the deal if more than 10 percent of Egghead's customers decline to allow their details to be transferred to the new company.
Advertising company DoubleClick has had to deal with both federal and state lawsuits alleging its use of cookies violated Web surfers' privacy. And US banks are facing the threat of federal sanctions after a study by the Center for Democracy and Technology found that only 22 percent of banks gave consumers an easy way to opt out of having their information redistributed.
Ultimately, only you can decide just how much effort and money it's going to take to bring yourself in line with the new legislative requirements. The key is to start now, work quickly, and make it a corporate priority to continually inform your online customers what you're doing. They will respect you for it, and in the longer term it will make your online business far more viable.
-The law doesn't say you can't keep information," says Sandra Birkensleigh, partner for global risk management with PricewaterhouseCoopers. -It just says that if you're going to obtain it, keep it, and use it, you have to be prepared to tell people that's what you're keeping on them and why. None of this is meant to stop you doing things unless you're doing the wrong thing. It's simply about greater transparency and access for individuals to what companies know about them."
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