22.3. What Do the Five Elements of Privacy Mean to You?
There are just a few basic principles that you need to understand: notice, choice, access and accuracy, security, and oversight. Then you need to know what they mean to you in building your company's CRM program.
22.3.1. Notice
Awareness is telling the truth about what data you collect, where you get it, why you need it, how you use it, and whom you let see it. Start with developing an internal privacy policy that will be the basis for defining your company's practices and the foundation from which you'll make customers aware of your intent. Keep your policy simple and accurate. Because your internal practices must match your stated policy, begin by documenting what you already do. This way, you don't need to worry about getting massive approvals or making lots of changes happen immediately.
Next, you should create an online Privacy Statement. This is where the rubber meets the road for your customers – where you disclose what you're doing. Create a very short statement that briefly summarizes your company's policies. You should begin placing this on all hardcopy response documents such as product registration cards. It can also be used on the phone when customer service reps are collecting customer information that would be extremely valuable for understanding your customer's experience.
Make sure your partners (with whom you must share customer information in order to do business) have a privacy policy that is at least as stringent as yours is. Include this requirement in your contract with them. As in all other aspects of the total customer experience, the customer perceives that he is doing business with you, not the retailer or dealer.
Get involved with educating your customers about what they should expect regarding the privacy of their personally identifiable information. Use common language. You need to build confidence and not hide behind confusing language that no one understands. It would tremendously help customers to understand what to look for if we all organized our privacy statements around these same five elements. Make it part of your brand strategy. If you're doing better at this privacy thing than your competitors, let your customers know. But don't do it by slamming your competition; tell customers what to look for and how effectively you are protecting them!
22.3.2. Choice
Choice involves giving the customer the ability to decide whether or not he agrees to let you use his data in the ways you've described. After you've made the customer aware of what you intend to do with his information (besides the basic transaction he is performing), give him a chance to refuse giving permission for these additional uses. But no matter what he chooses, he can still complete the current transaction. Note that this is much better than losing an order because the customer didn't like your policy and didn't have any other way to let you know! Choice requires that you provide a way to let the customer answer “yes” or “no” to whether you can use his data after the transaction is completed. How would you use this data? Typical uses would include unsolicited sales and marketing contacts from you and/or selling or leasing his information to a third party. Choice requires that you have a way to store the answer somewhere safe so that you can continue to honor the customer's decision over time and across the organization. If you do what you promised and continue to develop the relationship, customers will often relent over time, recognizing that you are a company with integrity that they can trust with even more of their information.
Important concepts that relate to giving your customers control over how you use their data include what you do if they have not told you what they want (opt-in versus opt-out) and your policy on sending unsolicited e-mail (spam).
Opt-in/Opt-out
The question of opt-in/opt-out is one element of choice, and it is less confusing than it has been made to appear. It involves only one thing: What do you do with customer data when the customer has not answered the choice question? Obviously, it is perfectly fine to contact a person who has said “yes,” and it is absolutely not okay to contact a person who says “no.” But what should you do with those people who did not answer either way?
Opt-in means that if a customer did not answer the question, you must treat him as if he answered “no” (do not contact). This is the law in Europe, and many companies are making it their policy. For example, HP has changed its contact policy to opt-in.
Opt-out means that if a customer did not answer the question, you may treat him as if he answered “yes” (okay to contact). This is standard for most of the world outside Europe.
The most important thing to understand about this opt-in/opt-out question is that it does not change what you ask the customer, but how you behave after he has made his decision. An opt-in policy includes only those who answered yes, while an opt-out policy excludes only those who said no. Therefore, you must know what the customer actually said. It is critical that you never infer (default) the customer's choice. You must store the actual response, whether it is “yes,” “no,” or nothing (didn't choose either).
Spam
I'm including spam within the “choice” section, although technically it offers customers no choice at all. Spam is narrowly defined as sending thousands of completely untargeted email messages by calculating common name variations (e.g., [email protected]; [email protected]; john_doe; john.doe; doejohn; and so on). In the broader meaning that has come into popular use, it is any @!*!*# e-mail that you didn't want to receive! Spam is unacceptable. If it's not yet against the law where you are, it will be soon. Worse, it has a horrible impact on your customers' ability to trust you. You should e-mail only if a customer has given permission (opt-in is becoming the universal standard for e-mail) and always make it easy for her to say no to future email by providing an easy to use “choice” option in every e-mail you send.
In addition to addressing the basic questions of unsolicited contact and third-party access, you may also want to track customer preferences in terms of how they wish to be contacted. Which touch points would they prefer you to use? Their choices could include phone, e-mail, and direct mail. Strictly speaking, asking the two basic questions covers you, but it's a good business practice and good relationship management to get customers preferences. Some people feel that the telephone (or e-mail, or whatever) is more invasive than other touch points, so if you allow them to choose the ways you can contact them, you get a “relationship” advantage. You can continue to communicate with them while acknowledging and respecting their preferences. Why give up all opportunity to contact a customer just because he doesn't want to be telephoned? By capturing and saving contact preferences, you will keep access open to more of your customers (just not through all touch points).
After you have gained permission, you must not substantially change your policy (at least you must not relax it) without regaining the customer's permission. In other words, before changing or relaxing your policy, you must ask for permission to continue using the customer's information! This requires that you not only save what the customer said, but when he said it (date) so you know which version of your policy was agreed to. For example, should you decide to change current policy and start to link your anonymous web behavior data to your customer list, you must get customer permission first.
Throughout this book, you have been encouraged to think of your customer data as a company asset and to treat it as such. It might logically follow that if your customer database is an asset, it should be available for use as you wish or even for sale if a company must liquidate all its other assets. No final decision has been made as to what will be illegal, but most courts have taken a conservative stand supporting consumer privacy protection.
The difference between a customer information asset and data warehouse is that there hasn't been agreement that you actually own your customer information asset. It still belongs to your customers, even though they have given it to you to use. It parallels the situation in which you lease equipment or stock inventory that you haven't purchased yet. There is great benefit to having access to these assets, but if you go out of business, you don't get to sell those assets; they go back to the owner.
22.3.3. Access and Accuracy
Accuracy and access refers to letting a customer review and correct his own data. This is often the most difficult item for a company to accomplish, especially because, in theory, it should apply to all offline data as well as online. By the way, “access and accuracy” has been the law in many countries in Europe for a long time, long before most of us ever heard of the web. So what can you do? The minimum – but acceptable – solution is to have tools and processes in place (such as an inventory of all your major customer databases) that will allow you to easily retrieve and print all stored customer information. (Credit bureaus have done this for years). Send it to the customer with an offer to correct information that he marks up and sends back to you. (Obviously, you should actually make the requested corrections to his data.) It's even okay to charge the customer a reasonable fee to cover your costs for creating this type of report. (Again, the credit bureaus are an example.)
Clearly, you need to build a capability for customers to review and correct as soon as possible any data that they have given online. This is a big step in building customer confidence. Customers are much more nervous about the thought of turning their information over to a big black box where it will remain forever invisible and inaccessible. Also, consider that this can be a great opportunity to have your customers maintain your database for you (yielding a more accurate database for much less money). Make this part of your data quality management strategy. Customers are certainly in the best position to keep their profiles accurate and up to date. If you have built a strong relationship with your customers, they will see a benefit in keeping you posted about changes in their lives. (I never change my e-mail address without letting United Airlines know right away.) And, you'll get an additional indicator of your most loyal customers. Someone who's maintaining his data at your site is investing his time in your relationship!
22.3.4. Security
Security is keeping customer information safe from anyone with whom you have not planned to share it. You should protect your customers' personally identifiable data from the moment it leaves their PC until you no longer keep it. While it travels over the Internet, data should be encrypted. After it's stored in one of your company's databases, it should be protected with a combination of a firewall, encryption, and passwords. Don't forget that this requirement extends to any database that is part of your business environment but hosted on a third party's computer. I know companies who've been very proud of their internal system security only to have one of their databases hacked while it sat outside the company's walls. Security involves finding the right products and technology and using them. For example, don't turn off your network firewall because you know you plan to log on remotely while on vacation. This could open the way to a computer break in.
22.3.5. Oversight
Oversight refers to giving your customers the option to contact an independent party if they feel their privacy rights have been abused. Providing access to a third party is an excellent way to build customer trust, and it's a responsible way to combine self-regulation with deflating the argument that self-regulation leaves the fox guarding the chicken house. Third-party privacy seal programs, such as the BBBOnline (subsidiary of the Better Business Bureau) Privacy Seal, offer policy review and dispute resolution, but in an impartial way. The first step is to give the company a chance to show that the complaint is unfounded or to fix an issue they weren't aware of. Only if the company refuses to correct a reported violation will BBBOnline refer the issue to the FTC for final resolution under the false advertising statutes that have existed for years. I am a strong supporter of BBBOnline because they have all the bases covered, including these:
A strong brand image in the consumer advocacy arena
A robust assessment process
Existing infrastructure for dealing with consumer complaints and for working with the Federal Trade Commission to resolve disputes
Global visibility and global connections
BBBOnline has worked with government groups and consumer organizations around the world to develop a global network of privacy seals. Much like the Better Business Bureaus fair advertising seal, these privacy seals indicate that the company that displays the seal has been reviewed, has met a set of privacy standards, and is authorized to display the seal. The seal also guarantees the customer an avenue through which any concerns he may have can be addressed. The first international partnership of its kind was established with the Japanese Privacy Seal authority (JIPD). BBBOnline has also been actively engaged with the Department of Commerce on another initiative known as Safe Harbor. In an effort to resolve the differences in privacy approaches, the United States government and the European Union jointly launched the Safe Harbor initiative that the European Union approved in July 2000. Safe harbor is currently in use with Hewlett-Packard being one of the first large companies to be certified. The BBBOnline Privacy Seal includes all requirements for the United States/ European Union Safe Harbor Agreement. Companies who receive Safe Harbor certification from the Department of Commerce are compliant with the European Union Data Protection Directive and may, therefore, transfer European customer data across borders. Having the seal means that customer information can be transferred across country borders. This is a huge advantage for the many companies whose business crosses borders and almost mandatory for online businesses that can't control who accesses their web site.