Shades of Gray: Privacy and Online Marketing

Unless they’ve had their head in the sand, anyone following the Internet Economy knows that one of today’s most hotly debated issues is privacy — with a capital “P.”

Yet for e-businesses that want to sell successfully online and instill trust in their customers, privacy is not always a black and white matter.

The shades of gray inherent in the privacy debate are many, which is why different approaches to Web privacy can be appropriate and important for different types of consumers and the online businesses that serve them.

With all the privacy concerns out there (and some of the hype), sorting it all out can be intimidating for companies shaping their online strategies. Here are five things that e-businesses need to think about when tackling the big “P.”

Privacy means different things to different audiences.

Selling raw production materials online to a corporate procurement manager and blue jeans to Joe Smith from Montana are not the same. Different types of online customers, depending on their circumstances and goals, will be comfortable sharing different levels of information.

In a B2B environment, for instance, corporate customers often want business Web sites to keep as detailed a profile as possible for ease of re-ordering and to ensure seamless service for multiple individuals from the same organization. Companies need to be sensitive to the differences inherent in selling diverse products to diverse market groups and tailor personalization tactics accordingly.

Honesty is always the best policy, period.

Take your mother’s advice on this one and make sure that your customers know what you’re doing.

Companies need to clearly and conspicuously disclose their privacy policies. This is one area that is black and white. Violating a customer’s trust — even once, even a little — can destroy a valuable relationship. The risk of losing customers who find you’ve been dishonest (or not forthcoming) is far more damaging than losing customers who are uncomfortable sharing information.

Show your Web visitors that knowledge and a better understanding of them can work in their favor.

Information helps businesses serve their customers better, faster and more efficiently. By using consumer information the right way, companies can develop trusting, one-to-one relationships with their customers that will be mutually beneficial for years to come.

If Web visitors understand the value of sharing information, they’ll be much more likely to fill out your registration forms and answer your questions. There has to be something in it for the customer. Make sure they know what that something is.

Separate business from the personal without sacrificing personalization.

It does sound like an oxymoron, but think about it. There’s a big difference between understanding buying patterns on a business-to-business or business-to-consumer commerce site for the purpose of improving the site and the visitor’s experience (i.e. personalization) on the one hand, versus following Web surfers into chat rooms and through Internet activities completely unrelated to their commercial interests.

It is concern over Web companies “learning too much” about private activities that lies at the root of consumer fears about online intelligence.

Making an analogy in the offline world, you probably do not mind that using your club card at the grocery store allows the store to record your purchases, if it offers you better prices and service. But you probably would not like it if a grocery store representative followed you home to see what you keep in your cupboards.

Use the same common sense when looking at what your customers are doing on the Web. It is business, not personal. Be very clear on where to draw the line.

The flip side of privacy: It’s a two-way street.

E-businesses have privacy concerns, just as consumers do. Especially with B2B sites, companies are often opening up their entire enterprise to the public, a potentially vulnerable situation.

For example, with entire enterprise resource planning (ERP) systems interfaced to the Web, anyone — even competitors — can gain access to sensitive information such as inventory levels or product availability data. Looking at privacy from a “we’re in this together” perspective, it’s easy to see that mutual trust and respect will go a long way.

Security is a big part of the picture, as is full disclosure and responsibility. Show your customers that you are serious about protecting their information, just as you are serious about protecting your own.

Let them know what you are doing with it, why, and what’s in it for them, and they’ll be more inclined to share. Plus, give them just as much access to the information they need to do business with you.