Chapter 17

Sharing Customer Data Throughout Your Enterprise

In This Chapter

Assisting with advertising and market research

Using customer data to identify product gaps

Understanding the role of customer data in pricing and revenue management

Comprehending the role of data in customer relationship management

Responding to law enforcement requests for data

Your customer database is your stock in trade as a database marketer. You spend a great deal of your time and budget trying to build an accurate and comprehensive picture of your customers. This allows you to be very effective with tactical communications that drive revenue to the bottom line.

But that data you work so hard to compile has a wide variety of uses beyond simply executing database marketing campaigns. Everyone who’s doing anything related to marketing or advertising has an interest in understanding your customer base.

And interest in your customers extends beyond just the marketing and advertising functions in your company. The role of customer data in making business decisions is expanding all the time. You’ll experience a continuous stream of requests for data coming from a wide variety of sources.

Building strong partnerships outside the database marketing department is a core aspect of your job. Customer databases are expensive to build and maintain. By making your customer database a critical part of other departments’ day-to-day operations, you open the door to getting some budget and resource help from those departments. This in turn improves your infrastructure, and everyone benefits.

In this chapter, I talk about some of the business functions that can benefit from access to consumer data. The way customer data is used both inside and outside marketing depends quite a bit on the nature of your business. This chapter points out some of the more common applications.

Customer Data and Advertising

As I discuss in Chapter 12, your overall marketing presence is most effective if it’s coordinated. You want your company and brand to show a consistent face to consumers, regardless of how you’re communicating with them. In part, this means keeping the messages and offers that you’re communicating through database marketing campaigns consistent with the messages and offers being advertised through other channels.

But there’s another way you can help to optimize your company’s marketing presence. One of the big challenges for advertising is figuring out where and how to advertise. In a nutshell, this amounts to deciding what types of media to buy, when, and how much. Your customer profiles are very useful in this process.

Buying traditional media

Traditional media is an umbrella term that refers essentially to non-electronic channels. The typical examples are television, print, radio, and even billboards. The term old media is often used to distinguish these channels from new media like the Internet and social networking sites.

The cost of advertising in any given channel depends, quite simply, on the number of people that you can reach. The pinnacle of television advertising is the Super Bowl. The problem is that at a million dollars plus per minute, that air time is out of reach for most marketing budgets.

But for a million dollars, you can get a great deal of advertising done. Super Bowl commercials work because virtually everyone sees them. But as I point out in Chapter 2, your target audience is usually not everyone.

The companies that sell advertising in these traditional media generally have a pretty good sense of the audience they’re reaching. Television stations, for example, get a lot of viewer demographic information from the Nielson surveys that have been run for decades. Magazines have demographic profiles of their subscribers.

The trick in purchasing advertising is to match up those audience profiles with the profiles of customers you want to reach. This is where you come in.

In Chapter 7, I discuss a number of ways to profile your customers. Among them, demographic profiles and geographic profiles tie most closely with the way advertising audiences are segmented. By profiling your past customers based on the types of data that define advertising audiences, you can help to get advertising in front of the consumers for whom it is relevant.

Television networks are just that. By definition, these networks have local affiliates. Advertising can be purchased selectively by geography. That means you can help focus this geographic exposure by segmenting your past purchasers based on their place of residence.

Demographics, particularly age and gender, play a huge role in TV audience profiles. But they also play heavily in describing the subscription base for print media, such as magazines. Put your marketing hat on and page through any periodical. You’ll find an amazing uniformity in the types of ads that appear in it.

This uniformity is a reflection of demographic profiling. More specifically, it’s a reflection of the matching up of demographic profiles. The periodical has developed subscriber profiles. The products that are advertised in its pages are targeted at consumers with profiles that are similar to those of the subscriber base.

Buying “new” media

Customer profiles play a similar role in the purchase of online and other electronically delivered advertising. But in the case of these new media channels, the profiles can be significantly more robust than those used in offline ­channels.

In Chapter 13, I discuss the use of data on the web. A tremendous amount of surfing data can be used to analyze consumer behavior online. For this reason, transaction-based customer profiles are central to deciding which ads to serve up and where. But this doesn’t mean that more traditional demographic profiles don’t have their place.

Getting your website to pop up on search engine pages is a major component of online marketing. Search engines are getting ever more sophisticated about serving up content based on more than just search terms. In particular, many search engines build consumer profiles based on past search behavior and which websites were actually viewed. They then serve up search results selectively based on a user’s profile as well as what terms the user searched for. And you can buy sponsored search-result placement based on these profiles.

Social media websites are doing the same thing. They sell advertising placement based on customer profiles. These profiles are built using data from both user registration information as well as site usage.

Here again, you can be of assistance. It’s been my experience that the marketing done via Internet and other new media is done largely independently of offline marketing databases. That’s largely due to the rapid evolution of new media channels and the need to adapt quickly.

To the extent that your marketing database contains information that’s not available online, you have an opportunity to help out your online partners. Profiles that you build based on offline transactions or demographics can still be useful in new media marketing efforts. Offline profiles are used more and more frequently to drive online prospecting. The idea is to look for new customers online who fit the offline profile of a profitable customer. And in most cases, it’s beneficial to keep profiles consistent across channels. It facilitates a seamless customer experience with your brand.

I’ve observed one situation repeatedly over the years related to purchased demographic data: It often gets purchased twice. The Internet group buys demographic appends for their registered users. In the meantime, the same or similar data is being purchased for households in the marketing database. Because there’s often a great deal of customer overlap between these databases, some money could be saved by coordinating these purchases.

Assisting with Marketing Research

Most companies do some level of consumer research. Surveys and focus groups are the two most prevalent forms of such research. Surveys, if they’re well designed, provide data that can be analyzed using advanced statistical techniques. They can even be used to build customer profiles and segmentation schemes. For this reason, surveys fall under the category of quantitative research.

Focus groups, on the other hand, are used to get a sense of people’s attitudes and decision-making processes. They don’t really provide hard data that can be churned through by statistical procedures. They provide perspective and context. Focus groups fall under the category of qualitative research.

In both cases, however, your database can play an important role marketing research. Given the fundamentally quantitative nature of your database marketing efforts, you’ll no doubt be more actively involved in quantitative research efforts (surveys). But you have a contribution to make on the qualitative side as well.

Selecting focus groups

On the qualitative side, your fundamental role is to aid in selecting the members of focus groups. Focus groups are small — usually only a handful of people at a time. And it takes time and expertise to facilitate a focus group productively. It’s important that the members of the focus group are chosen well.

I used to work with a guy who was pretty skeptical of focus group research. His skepticism was based on a particular experience he had while doing marketing for a bank. He was asked to identify a group of credit card customers to be invited to participate in a focus group. This research was intended to gauge people’s attitudes towards various fee and rate structures.

To get a clear picture of such attitudes, they decided they wanted to talk to customers who routinely carried balances on their credit card. I think their attitude was that if people weren’t paying interest, they weren’t going to have very strong opinions about interest rates. So, one of the key criteria for being invited to participate was carrying a balance on their credit card.

But when the subject came up in the focus groups, most participants claimed that they typically paid off their cards every month. These claims were the source of my colleague’s skepticism about focus groups. I suspect that the social dynamics of the situation played a role in these claims. There can be a stigma attached to debt. But this example does point up the usefulness of using actual behavioral data in selecting members of focus groups.

Customer data and survey research

As in the case of focus groups, you may occasionally be asked to provide a targeted list of customers for the purpose of sending them a survey. But with survey research, your data plays a larger role than it does in focus group research.

First, the results of the survey questions can be combined with data from your marketing database to provide a more complete picture of the survey respondents. And you have the analytic tools to build profiles and models to aid in the analysis of survey results.

One common reason for doing surveys is to gauge customer satisfaction. It’s become almost standard operating procedure for many companies to ask consumers to “answer a few questions about your recent experience” after a purchase is made. In many cases, this is used as a quality control check.

There are good ways and bad ways of doing this. I have a pet peeve about companies that use these surveys to financially punish their employees. This seems to be a particularly popular strategy among some auto dealerships. I have frequently been coached by the attendant to fill out the survey with no responses other than “completely satisfied” to prevent the attendant’s pay from being docked.

The problem with this approach is that the surveys aren’t really providing information about quality. Most people, even if they have a minor problem, aren’t willing to throw an hourly employee under the bus. In that respect, I tend to think of these types of surveys as really being customer segmentation tools. They identify mean people. For my own part, I’ve simply stopped responding to them.

My point here is that by connecting the survey results back to your database, you can help validate that the survey is really measuring what it’s intended to measure. If customers who aren’t “completely satisfied” keep coming back to the dealership to get their cars serviced, then you might get suspicious of your survey methodology.

Another common reason for doing surveys is to build profiles of the customers who are most likely to be interested in your products. Once you understand what features define an interested consumer, you can extend this profile to your entire database of customers.

The survey results may contain information that’s not directly available in your database. But like the response models I discuss in Chapter 16, this information can potentially be modeled based on data that you do have on hand.

Survey research is a two-way street when it comes to exchanging customer information. You can provide lists that fit the profile of the customers that will be surveyed. You can also learn from the results of these surveys and apply them to your broader customer base.

Customer Data and Product Development

Ideas for new products can come from a variety of sources. Engineers discover uses for by-products of a manufacturing process. Marketing research identifies new trends in consumer interests. Many companies have full-time research and development teams. Frontline salespeople make product suggestions based on their interactions with customers.

Your customer database can also be a source for new product inspiration. You have a unique perspective on which customers are buying which products. You’ve built customer segments and profiles that describe the primary audiences for your brand. Conversely, that means you know which segments aren’t buying your products.

Marketers use the term under-penetrated to refer to customer segments or markets that don’t buy products with the frequency they’d like. The term is frequently used in connection with age or lifestage segments. It’s also used to refer to specific geographic markets.

A market or audience might be under-penetrated for a number of reasons. It may be a brand awareness issue, for example. But sometimes it’s simply a consequence of your not having a product that’s relevant to that particular audience. In any case, your marketing database may contain clues to indicate where a new product offering might be needed.

Sometimes price can be a big issue. Automobile manufacturers go to great lengths to make sure they have products available across a broad price spectrum. They’ve learned that being under-penetrated in the 20-something age group is ominous. If they don’t develop brand loyalty early on, then it’s much harder to attract customers later.

Fast-food restaurants have also done a good bit of product development based on under-penetrated markets. Twenty years ago, it would never have occurred to me to go to a fast-food chain to get a salad for lunch. They simply didn’t offer them.

But as people started becoming increasingly health conscious, these restaurants began losing market share. The hipster crowd was becoming increasingly under-penetrated. So fast-food outfits started developing healthier menu options that would appeal to this under-penetrated segment. As a side note, it seems that simply offering these options is enough. They don’t need to actually sell that many of them. More than once, I’ve talked my wife into pulling into McDonald’s by reminding her that they offer salads. More often than not, she ends up ordering a Quarter Pounder with Cheese.

Keep an eye on your product sales data as it relates to your core customer segments. By monitoring the purchase volumes by segment, you can spot downward trends in market penetration. These trends are often signals that you have a product gap. Your product development team would very much like to understand and address such trends.

Customer Data and Pricing

Determining how to price your products is partly an exercise in basic accounting. How much does it cost to produce a product, and what is a reasonable profit margin? And this is only the beginning of the story when it comes to pricing decisions.

The science behind pricing actually gets quite involved. Sometimes discounts are necessary to address sales shortfalls. Sometimes certain products are sold at a loss in order to gain future sales. An understanding of customer behavior is central to making effective pricing decisions.

What is revenue management?

The discipline of pricing actually has a more technically flamboyant cousin known as revenue management. Revenue management is an analytic process that takes into account customer buying patterns and available inventory. This approach was initially developed in the airline industry. But its use has spread to many other industries as well.

The problem for airlines is two-fold. First, it’s incredibly expensive to fly a plane. And it’s incredibly unprofitable to fly an empty one. Second, once a flight is scheduled, the seats on that flight are perishable assets. Once the departure time arrives, empty seats mean lost revenue. There’s no way to recover it.

Everyone who travels at all knows that airline ticket prices fluctuate constantly. Occasionally when I fly, I’ll ask the person sitting next to me what they paid for their ticket. Often, the price is significantly different from what I paid.

A seemingly odd thing sometimes happens with connecting flights. I’ve sometimes been tempted to drive a couple of hours to a nearby airport in order to get a direct flight to where I’m going. But I’ve noticed that sometimes that very flight is actually less expensive if I pair it with a connecting flight from my home airport.

These price fluctuations and counterintuitive pricing structures are the result of revenue management techniques. Ticket prices are constantly balanced against available inventory — empty seats — using revenue management techniques.

The oddness of the pricing structure is a direct consequence of the mathematics that underlies revenue management. Essentially, they’re looking to optimize their entire inventory. That is, they’re trying to maximize their overall revenue. This can’t be done by trying to maximize revenue for each individual seat.

All we as consumers see is a particular flight or small group of flights to a given destination. In the case of my example about a flight being cheaper if it includes a connection, the revenue that’s being optimized is the total revenue for both flights. They may get less money from me that way, but they manage to fill up both flights with this strategy. In the big picture, this leads to more revenue.

One theme that comes up when I talk with revenue management folks is that they try very hard to avoid training customers to wait for a discount. If airlines consistently discount tickets the week before the flight departs, consumers will pick up on this pattern. And the airline will have for all intents and purposes lowered its fares.

So one technique they use is to offer discounts for early bookings. If there’s one trend that’s pretty recognizable in airfares, it’s that waiting to book gets you a more expensive ticket. By discounting early, they’re filling up their inventory. This in turn makes tickets for that flight a scarce commodity, and, according to the law of supply and demand, up go the prices.

Beyond the airline industry

The use of revenue management techniques has spread far beyond the airline industry. Naturally, its first expansion encompassed other sectors of the travel industry — namely, rental cars and hotels. I say naturally for a couple of reasons.

First, folks in the travel industry talk. Travel agents and travel planning websites are constantly bundling car and hotel offers with airline ticket purchases. The executives in those industries have a vested interest in cooperation. So it’s natural that these industries would be the first to find out about revenue management success stories.

Second, the rental car and hotel businesses have something in common with airlines: perishable inventory. An empty seat on a flight can never be recovered after the plane leaves the gate. So too with rental cars and hotel rooms. Every day a car goes unrented or night that a hotel room stays empty is lost revenue.

Revenue management techniques have since been adapted to a wide variety of industries. Industries from financial services to retail apparel sales have found ways to apply the mathematics of revenue management to their pricing and discounting strategies.

In all these cases, revenue management techniques begin with customer data. In particular, customer purchase data plays a central role. How price sensitive are customers? What effects do various discount levels have on sales volume? How far in advance do customers book travel? All the customer behavior information contained in your marketing database is potentially relevant to advanced pricing analysis.

And it’s not just behavioral data. Your profiles and segmentation analysis will also be of interest. Pricing decisions, particularly discounting decisions, can be made based on purchase channels as well as particular audiences.

In my experience managing a marketing database group, the revenue management and pricing folks were some of the more frequent visitors to my office. They tend to be pretty astute from an analytic perspective. And they’re voracious consumers of data.

Customer Relationship Management

As promised in Chapter 1, I’ve thus far completely avoided the subject of customer relationship management in this book. You have enough to worry about in managing your database marketing efforts. But I’m sorry — the subject can’t be avoided any longer. And you definitely have a large role to play in this arena.

What is CRM?

The term customer relationship management, usually abbreviated CRM, has become a marketing buzzword. It means slightly, sometimes vastly, different things to different people. For me, it’s an umbrella term that refers to the integration and use of customer data throughout the enterprise.

When I was a kid, we lived in a small town. When I started to get an allowance for doing certain chores around the house, my father took me to the local savings and loan to open an account. We marched right up to the manager. He opened my account, handed me a passbook (I know, I’m dating myself). He told me that if I needed anything at all to just knock on his office door.

This manager knew my family. We were neighbors. He knew me and my particular financial situation. As I grew older and took jobs, bought a car, and eventually went to college, he remained my banker. Every time I walked into the bank, he greeted me and personally saw to my needs.

There are very few businesses that can still operate this way. But this example is my metaphor for what CRM should strive to be. It’s a way of using customer data to re-create this personal customer experience.

A growing number of companies sell CRM software and services, such as Siebel (now Oracle) and SAP. These packages aren’t all created equal. And they don’t all do the same things. Many packages are designed to be used at call centers. Others are focused on the web. Still others are designed as sales force automation tools. When evaluating CRM software, be very persistent in understanding exactly what the software is designed to do and whether it fits in with your company’s needs. The term CRM has become so widely used by software sales people that it doesn’t really mean anything anymore. When exploring potential CRM implementations, stay focused on your business and your business processes. Don’t get sucked into thinking it’s all about software.

Sharing data across customer touchpoints

CRM is easier said than done. Doing it well involves getting customer data to everyone who interacts with the customer. This is a potentially huge data integration challenge. It takes significant investment and time. And it’s not something that’s really ever finished. It’s implemented in an endless series of phases.

In that sense, CRM is as much a business strategy as anything. It’s a commitment to doing everything you can to know your customers and interact with them on a personal level. In this section, I outline a few common components of a typical CRM strategy.

Your marketing database

In a sense, CRM is an extension of database marketing. Almost everything I talk about in this book is part of your company’s CRM strategy. You’re actively trying to understand your customers and engage them in the most relevant way possible.

Because CRM is based on knowing your customer, your marketing database lies at the center of your company’s CRM strategy. The customer profiles you build are designed to help you implement database marketing campaigns. But they’re also relevant to others who interact with the customer.

You’ve spent a great deal of time and effort integrating customer information from across your company. CRM is about pushing that integrated picture of the customer back out to where the data came from in the first place.

The web and new media

As I discuss in Chapter 13, there’s a large amount of customer data available on how users are navigating the Internet. And with the advent of mobile computing, this data is growing all the time. Managing and using this data is another core part of your CRM strategy.

A key challenge is to try to integrate the customer experience across all of their access points. You want to show the same brand “face” to the customer whether they’re browsing on a smart phone or on a laptop at the local coffee shop.

Another challenge is to integrate the customer experience throughout social media channels like Facebook, Twitter, and the various gaming sites. Because users are often logged in to more than one site at once, there’s a constant tug of war to determine what content they’ll see. The subject of social media marketing is a big one. Check out Social Media Marketing For Dummies by Shiv Singh and Stephanie Diamond (Wiley, 2012) for a full treatment.

The online customer experience is relatively easy to personalize and customize based on profile and usage data. For this reason, your online and new media marketing strategies will be a core part of your CRM strategy. The more customer interactions, sales, and service you can effectively conduct online, the better able you are to add a personal touch. But the key here is effectively. Online transactions need to be well integrated with other customer channels, like call centers, to be fully effective.

Customer service and call centers

One of the most obvious touchpoints is your call center. Customers call in to place orders, request service, or report a problem. It’s extremely helpful for your call center representatives to have a clear picture of the customer relationship available while they’re talking to them.

There’s nothing more annoying to me than calling a number and getting routed to an automated phone system that doesn’t allow me to do what I want to do. However, I do occasionally have a positive experience in that regard.

I recently had some trouble with my cable box. I discovered after some digging that the cable company was doing some upgrades related to converting to the new all-digital standards. The upshot was that every time they made a change, I had to reboot my cable box.

Now, my cable box is in an extremely inconvenient location because of the shape of my living room. Rebooting it myself involves a ladder and a screwdriver. So I called my cable company to reboot it for me.

Predictably, I was greeted by an automated system. But it did recognize my number and identified me and my account correctly without my needing to tell it. It then asked me if I wanted to reboot my box after asking me only one question to determine what I was calling about. The system told me it had sent the reboot signal and it would take a few minutes for it to complete its procedure.

So far, so good. I hung up, waited, and tried again. Still no dice. So I called back. This time the system recognized my number and immediately asked me if I was calling back about the reboot. I said yes and was connected with a live service agent who ended up helping me through the problem.

This is a pretty good example of a call center CRM system that’s working well. They recognized me and what was going on. I didn’t need to repeat my account information over and over again. In fact, I didn’t even have to provide it.

Another aspect of CRM at the call center involves serving up offers based on previous or current purchases. In Chapter 13, I talk about serving up offers and content online based on browsing behavior and customer profiles. The same approach can be taken when a customer calls in to place an order. The more the call center agent knows about the customer who’s calling, the more personal and relevant they can be.

Call centers frequently use scripts and structure decision trees in their CRM solutions. I admit that this approach can be useful for training purposes and for certain research calls. But I personally find it irritating to talk to someone who’s feeding me canned responses that aren’t really getting at what I need. It’s far better to provide customer data to the call center agent and empower them to respond to that information in the most relevant way possible. No script can ever hope to anticipate all calls.

CRM at the point of sale

Getting customer data out to frontline sales people is one of the most effective ways to personalize the customer experience. At that point, it really is a personal interaction. Unfortunately, this is one of the more challenging aspects of CRM.

Grocery stores do it to some extent through the use of loyalty or rewards cards. But for the most part, the personalization that this enables is limited to choosing which coupons to print out based on your purchase patterns.

The Apple store has actually mastered point-of-sale CRM quite well. When you walk in, you can essentially log into your Apple account from any machine in the store. And the employees can process transactions while you’re standing in front of the machine you’re buying.

This fact alone is more powerful than you might think. Computers and other devices are expensive purchases. If you’re forced to stand in line carrying a boxed-up computer and contemplating the price tag, you have time for buyer’s remorse to set in. Not so if you’re logged in and exploring the shiny new features of the machine while the salesperson is running your credit card and initializing your new device.

One effective strategy for moving in the direction of point-of-sale CRM is to let the customer bring their data. More specifically, you can take advantage of the fact that so many people are carrying their smartphones everywhere they go. By building apps that are useful to people at the store, you can effectively integrate your web and point-of-sale CRM approaches.

One example of this that I've found very useful is an app I found at Lowe's (www.lowes.com). It allows me to create a home profile to keep track of common purchases. I buy a number of things regularly: light bulbs, water filters, air filters, and fuses for various devices. But I don't buy them often enough to remember what size or model I need.

This Lowe’s app allows me to look up what I bought the last time. It’s organized by product type. And I can do it while I’m at the store. And I don’t need to get up on a ladder or behind the fridge to extract the filter to figure out what I need and then again to replace it when I return from the store. CRM is about making things convenient, and this app fits the bill.

Customer Data and Law Enforcement

Believe it or not, you’ll occasionally run across situations where someone in the law enforcement or legal community will take an interest in your customer data. Usually when this happens, your legal team is consulted first. But in any case, you should make sure you have their approval before providing any data.

Years ago, when I worked in the credit-card industry, there was a rather amusing legend in the company about a guy who worked in collections. The story (and I have no idea whether it was true) goes that somebody from the Justice Department showed up in the collections office to talk to him about a particular past due account.

The investigator was very curious about exactly how this particular collector had managed to get the home phone number of the person whose account was past due. The problem, as it turned out, was that the person in question was in the witness protection program.

I guess the situation wasn’t all that amusing for either the witness or the people that had to relocate him. But it earned a promotion for the collector.

Customer data and criminal investigations

There are a number of situations in which customer records may be subpoenaed as part of criminal investigations. They may want to know whether someone was where they said they were at a given time. They may want to understand what purchases were made by a given person.

Because I’ve done a lot of work in the financial services industry, the most common law enforcement situations I’ve seen relate to financial records. The PATRIOT Act that was passed after 9/11 contains, among other things, some prescriptions for banks and other financial institutions related to the prevention of money laundering.

The focus of these rules relates primarily to large, anonymous monetary transactions. The airline industry is required to respect the no-fly list designed to prevent terrorists from boarding planes. But there’s also a do-not-wire transfer list that banks need to check when they process these transactions.

Another type of monetary transaction that’s tracked closely is large cash deposits. These types of transactions have been of interest to the IRS for a long time. They’re sometimes signals that tax evasion is afoot. But they also are of interest as signals that more nefarious money laundering might be going on.

There’s a tension in the legislative environment and legal environment around customer data. On the one hand, consumer privacy is a hot button issue. On the other hand, public safety concerns in the wake of 9/11 have led to some increased authority for law enforcement. The legality of law enforcement requests for data is not always cut and dried. You need to let your company lawyers handle such requests.

Customer data and civil suits

Another situation where customer data is requested is in regard to civil court cases. Divorces get nasty. Business deals fall apart. The whole spectrum of people’s disagreements about money and property is fodder for the civil court system.

And when money comes up in civil court, financial records get subpoenaed. These subpoenas are generally pretty straightforward to deal with. But I repeat my admonition to check with your lawyers if one should arrive on your desk.

The more visible civil suits related to customer data involve lawsuits against the company with the database. As I mention in Chapter 3, you have a legal responsibility to keep your customer data safe.

Consumer credit lawsuits are a staple of the civil court systems. Inaccurate credit scores, unfair lending practices, and other violations of lending regulations produce a steady stream of court cases.

Another type of lawsuit that’s fairly common involves data security breaches. You’ve no doubt heard a number of stories over the years about someone walking out of a company with a disk full of personal information about customers. In the age of identity theft, this obviously raises some hackles.

Still another common theme for lawsuits is violation of privacy. The sharing and selling of customer information between and by corporations is coming under increased scrutiny. As I mention in Chapter 3, it’s important that you have a clear privacy policy and abide by it religiously.

Electronic devices, particularly mobile devices, provide a vast amount of customer data, including detailed location information. This data is a dream for predatory criminals if they can get their hands on it. This fact, combined with the widespread use of smartphones by children, is getting increasing attention in legislatures.