Invest in Privacy Policies and Keep Your Customers

Customer data is valuable. And through supply chain relationships, trading partnerships and collaborative commerce initiatives, companies have acquired a lot of it. However, according to CIO’s August 2001 poll of 86 IT professionals, nearly 80 percent of those surveyed believe that companies should not sell customer data. To maintain loyalty, it’s important to consider your customers and recognize what other companies are doing to ensure their privacy.

Consumers who feel a website has violated their privacy will shun the site.

If a website shared my personal data with other companies after it had promised not to, I would:

Continue to shop online but would not visit that site 46%

Stop using the Internet 6%

Continue to use the Internet and site, but more cautiously 8%

Continue to use the Internet but stop entering personal information or buying online 31%

Other and unaffected 9%

Total number of IT respondents: 4,701

Source: Gartner/G2 Report “Consumers Have Fears About Online Privacy: Deal With It,” May 2001

A CIO survey shows that IT execs overwhelmingly see privacy policies as a boon to e-commerce.

Will privacy regulations help or HURT e-commerce?

90% of IT execs say privacy regulations Help

10% of IT execs say privacy regulations HURT

Total number of IT respondents: 86

And Yet…While they claim privacy is important, more than halfof respondents (41 of 75) have privacy policies covering companies that handle their data; LESS Than half of respondents (36 of 75) have privacy policies that cover other companies in their supply chain. Most(68 of 75) have privacy policies covering employees.

Source: CIO privacy survey, August 2001

Best Practices

Revamp your internal privacy policy. Mandate that employees who use customer information first get permission or authorization from the CIO. Audit and record the use of customer databases, and insist that managers present a strong business case for accessing customer data.

Assign responsibility of customer privacy to the business and IT departments and hold them accountable. Assign someone who is familiar with the business and understands technology to make the business rules and assign a technologist to implement them.

Create a central profile of the customer that can be accessed throughout your organization. Take customer complaints seriously and tie them into your CRM system as much as possible.

Examine data sharing agreements with partners. Terms and conditions must be very clear and must protect your customer lists and anonymity. Often the exchange of information about customers is a key component of partnerships and affiliations. Determine what data should be shared, how to separate data that should not be shared and how to ensure data is not misused.