Privacy: A Vital E-Business Enabler

Although Web-based consumer activity is often the focus of attention, respecting and protecting privacy goes further than securing data retrieved online. As a matter of fact, privacy management and control should extend to every customer touchpoint (from the call center to fulfillment to shipping), while at the same time supporting enterprise corporate directives. In order to realize and sustain e-business results, organizations need to appreciate the following considerations.

Trust

E-business depends on trust—and a lot of it. All commerce involves some level of trust; however, e-business requires more of it because buyers are asked to provide greater amounts of personal information to online vendors they typically know little, if anything, about. Furthermore, increasing numbers of Web-based consumers understand that the frontend interface is connected to a backend infrastructure, making the confidentiality of their data even more tenuous.

Customers’ Trust

You can’t win customers’ trust if you don’t respect their privacy. Organizations that collect potentially sensitive information become custodians of personal data. Obviously, this trust must not be betrayed. IT systems and privacy policies need to protect personal data from theft and any unauthorized distribution or use. It is not just a matter of ethics—it is sound business practice.

Companies that violate consumer privacy needs make the foolish and potentially fatal mistake of valuing the data more than the relationship. At the same time, customers who are not comfortable with a company’s privacy policy may likely conduct their business elsewhere.

Respecting Privacy

Respecting privacy takes more than mere adherence to laws and regulations. Given today’s e-business landscape, where information is now a heavily sought-after commodity, it is no surprise that government is stepping in to mandate consumer privacy. However, no regulation, despite how well-crafted, can match everybody’s needs and preferences. Furthermore, as privacy preferences change over the course of an individual’s life, the government cannot always be relied upon to operate in sync with such shifts.

Consequently, the onus of effective, real-time privacy protection rests on the enterprise. Not only do governments require it—consumers demand it.

Customer Privacy Needs

Companies benefit when they harness their understanding of customer privacy needs. Customer relationships and loyalty are fortified when strong privacy practices are employed. Treating people the way they want and ask to be treated (and communicating those efforts back to the marketplace) is a strong one-to-one customer relationship management approach—and can offer companies a real competitive edge.

Heightening E-Business Results

Finally, companies can heighten e-business results when they value the customer over the data. An enterprise solution is key to integrating privacy into policies, e-business strategies, and processes. Thus, the following are the ground rules for e-business privacy:

• Businesses are custodians of personal data and must protect and secure it from theft and misuse.

• Companies need to know their customers, while being as open with them as they want their customers to be in return.

• Customers are likely to share more personal data if they are convinced their privacy is strongly protected.

• Gaining consumer trust, respect, and confidence is not a static event or policy; it is an ongoing process that requires continuous management.

• Privacy preferences are really critical customer needs.

• Privacy management can be a one-to-one marketing opportunity.

• Relationships with your customers are more valuable than the data. When customers feel respected, they are typically more loyal.

• When organizations build and support an enterprise-wide privacy solution, the potential return on e-business can be enormous^[1].

The preceding rules are a challenge, considering the rigorous demands of myriad industries, on any platform (with consideration for changing technologies) from mainframe to wireless^[3]. However, when privacy is built into every aspect of the organization, the highest returns can be realized from loyal, valued customers.

^[3]Vacca, John R., Wireless Data Demystified, McGraw-Hill Professional, 2003.