Insight May 1, 2018

How to Protect Consumer Privacy Without Ditching Personalization


Consumer privacy issues are complicated. People are deeply uncomfortable with the idea of companies tracking, monitoring, and storing their online activity and personal data – but many also crave the highly-personalized services this surveillance enables.

Our attitudes toward privacy and personalization often appear to contradict one another. A recent study from Verint Systems shows that 86 percent of respondents feel they should know when their data is passed on to third parties for marketing purposes.

However, the same study highlights the importance of personalization with 80 percent of consumers preferring service that is personalized to them and their needs – which requires the collection and use of their personal data.

Marketers know the power of demographic and behavioral data when it comes to creating a targeted campaign. In fact, a report from the Direct Marketing Association found that 90 percent of executives say they depend on consumer data for their marketing efforts. Still, most of those executives admit that consumer privacy issues are a big concern and putting security measures in place to protect consumer data could be better.

As companies that collect giant sets of data have fallen prey to internet hacking, online privacy issues have received a lot of attention. Business giants like Facebook and Google aren’t the only ones who should be concerned with consumer privacy. Many smaller companies have experienced the consequences of a privacy breach. To avoid losing consumer trust – and costly litigation – you need to design a policy that puts consumer privacy first.

Tips to Help Your Business Protect Consumer Privacy

Gather only what you need. Just because technology makes it possible to collect massive amounts of user data, doesn’t mean you should. After all, what you don’t have can’t hurt you.

Marketers would argue that more data allows for more personalization. Plus, even if you don’t use the data now, you might want it in the future. The flip side of that argument is that all the data you collect can be lost or stolen by hackers. In the interest of protecting consumer privacy, the best policy is to collect only the information needed to provide a product or service.

Safeguard the data you collect. As the number of companies reporting data breeches continues to grow, data security has become a top priority. Even if you don’t collect credit card numbers or other financial information, the data you store about your customers can be valuable to hackers. Instances of hacking can be embarrassing and costly for your business, so it’s important to secure your network, website, and data storage.

Depending on the kind of information you collect and how you store it, there are several key areas to consider in your consumer privacy plan. For a detailed guide on protecting personal information, check out the steps outlined by the Federal Trade Commission.

Be transparent. People want to know what you’re doing with their data. Transparency is key to addressing consumer privacy and security concerns, while also taking advantage of your customers’ data. To put your users at ease, you should post a privacy policy that discloses:

  • What information you gather from your customers
  • How their information is used
  • Where their personal data is stored
  • Who has access to their information

By offering your customers more than a boilerplate privacy policy, you can demonstrate your commitment to consumer privacy. Another way to build credibility and consumer trust is to display your BBB-certification and other security logos prominently on your website, especially at the point of sale.

Put your customers in control. When you share with your customers exactly why you want their information, they’re more likely to offer it to you. For example, a new customer might be more inclined to share their date of birth if they know they will receive a discount coupon during their birthday month.

Still, there are some customers who would prefer not to share something as personal as their date of birth, even for a coupon. If you offer these customers the option to decline to provide certain information, they are more likely to want to do business with you in the future.