Many businesses these days are collecting mounds of data about their customers, such their age, gender, interests and more. Online companies that offer a service can collect data the moment a user signs up. Having this information can be very useful in tweaking your product or marketing campaigns. But if customers suspect you're using their data in less-than-desirable ways, they may lash out and possibly stop using your product.
What's a data-driven business owner to do? It can sometimes be difficult to know where to draw the line, with people so freely giving out information to social media sites. And with the ongoing scrutiny of Internet privacy, you don't want to get yourself into trouble. Here's the right way to approach this sensitive matter:
Address the issue. According to Shane Green, CEO of digital identity management firm Personal, businesses don't have to abandon all data-collection efforts and retreat into a pre-digital existence. Instead, the key to handling customer's data is simple: be transparent. Tell customers what data you're collecting, why you're collecting it and what you're going to do with it. He says too many sites have not been clear about what they are collecting.
"They look at the consumer as being passive or uninformed," he says.
Green believes that a consumer revolution is taking place that will result in more informed and empowered customers. And businesses that aren't upfront about the ways they use customers' data will face their wrath.
Build a good reputation. It's essential, Green says, for companies to be transparent before an issue arises. If a company starts early, it can build a reputation for transparency that earn them the good will of their customers.
"Companies don’t want to end up in The Wall Street Journal as one of biggest abusers of customers' privacy. This is a ticking time bomb," Green says. "You don’t want to look like the company that’s being dragged kicking and screaming into a transparent world."
Gauge how your audience feels. What's the consensus of users on online privacy and data collection? Green sees two distinct philosophies that have emerged regarding customer's data privacy: One group that's "sort of surprised" data collection practices aren't out in the open, and another, louder group that's against the practice of data collection in general.
To Green, that latter group seems anti-progressive. Instead, Green says that data collection is the future of business and economic growth. But it has to be transparent. Take your audience's sensitivities into account when you're deciding how to collect data.
"I think there’s a growing community committed to the model of safe, secure and transparent data collection," Green says. "You’d never share anything if you thought the data was going into the ethos of the Internet to be sent anywhere to do anything and to be read by anybody."
In short, there's no reason to halt your data collection. Instead, be open to having an honest conversation about what you expect to get from your users. If you do, your audience will be more likely to stick around for the long haul.
How do you think businesses can be more transparent with their data? Sound off in the comments below.
Image by OPEN Forum