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 Personal
Information: The Push-Pull Between Companies & Consumers
As long as a market for a product or service exists, a company will
need information about the customers. This need can translate into a tricky
relationship between company and consumer -- especially online.
By David Hallerman
January 14, 2003 - eMarketer.com - In today's highly competitive
economy, information about customer demographics, purchasing habits,
financial status, and other personal matters offers companies an obvious
advantage. Combined with the internet tools that let these companies better
target customers, personal information is the oil that powers the engine of
early 21st century commerce.
While many customers want the benefits of accurately targeted marketing,
they also want to be left alone, without having their every move online
scrutinized. It is a contradiction that keeps the tug-of-war between
companies and customers over personal information buoyant.
As indicated in the chart below from Harris Interactive, the four main
concerns that US internet users have about the online collection and use of
their personal information can be grouped into two categories: one, the data
may not be secure and can be stolen by unscrupulous hackers; and, two, the
website will misuse the data and is not to be trusted.
Regardless of consumer concerns about privacy, US companies will continue
to gather data about their customers. Used as a marketing tool, websites are
a perfect locale for collecting personal identifying information—such as
name and e-mail address—which 90% of US websites do, according to the
Progress & Freedom Foundation. Additionally, 74% of sites collect personal
identifying information other than e-mail, which includes elements such as
interests and purchase intent.
Companies collect customer information online with various tools.
According to a PricewaterhouseCoopers report titled "E-Privacy: Solving the
Online Equation," there are six main "data magnet" techniques that companies
use:
- Cookies
- Web beacons
- Data aggregation
- Personalization
- Downloads
- Data sharing between related websites.
These techniques are typically used in concert, merging both gathered and
given personal information, to create complex data warehouses. And for each
of the six data magnet techniques, a privacy concern arises.
However, when companies provide customers transparency about how they use
personal information and choice of how or even if it's used, most privacy
concerns evaporate. That is why 93% of US internet users consider it very
important that a shopping website display a statement of how it will use
personal information.
Further studies, such as from Jupiter Research, indicate that companies
lose money because consumer concerns about the privacy of their personal
information make them hesitant to shop online. As your 21st century company
finds genuine ways to allay your customers' fears, you'll find more loyal,
profitable customers. |
