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Home Asian e-Marketing May - June 2010 eCRM: Striking the Balance Between Business and Privacy Issues

eCRM: Striking the Balance Between Business and Privacy Issues

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Until about thirty years ago, customer relationship management (CRM) existed only in the worlds of list houses and direct mail but this has all changed with the Internet and the rise of the digital world.

Enter eCRM (Electronic CRM) essentially, CRM over the Internet. Most CRM systems have one or more Web-based applications for selling to or supporting the customer, so the terms eCRM and CRM are often used interchangeably.

One of the main functions of eCRM tools is to collect information about clients, thus a company must consider the desire for privacy and data security, as well as the legislative and cultural norms. Some clients prefer assurances that their data will not be shared with third parties without their prior consent and that safeguards are in place to prevent illegal access by third parties.

Legislation and consumer privacy issues definitely affect the way marketers conduct their data business. Most experts agree that there's a constant tug of war between relevance and privacy. Striking a balance between protecting customers’ privacy and advancing the data sets that are key to marketers has never been more important.

The good news is that standards and compliance are evolving to maintain consumer privacy. This has resulted in the gathering of customer data becoming even more complex. In the digital arena, marketers have to work hard in order to ensure they don’t get blacklisted or labeled as spammers.

They have to ensure that data collection should be appropriate for the use to which it is promised to their customers. If the data is being shared with other parties or used for other purposes, it must be disclosed. The consumer should have some easy to execute choices regarding the use of their data and the sharing, and the information should be appropriately safeguarded against loss and unauthorized use.
However, the thing to bear in mind the most when it comes to eCRM and privacy is that it goes beyond the technology used and instead, boils down to gaining and maintaining the trust of the consumer. Companies that succeed here will be those that use data responsibly, those who respect their customers’ rights and who ensure that they safeguard all customer data properly.

What has become apparent is that privacy issues cannot be ignored by marketers at all. According to Razorfish’s VP of CRM Technology, John Zell, here are four key considerations all marketers should be thinking about when it comes to privacy and permission.

Standards and Laws are Changing All the Time

Consumer privacy and preferences, as they relate to marketing, are a key concern for clients. As we become a more online and connected world, there is the ever-increasing risk that your customers’ data can get hacked. While the approach in the U.S. has generally been to rely on companies and organizations to self-regulate, there is legislation that attempts to limit the display, purchase, or sale of Personally Identifiable Information without the person's consent. In Asia at the moment unfortunately, many nations in the region besides the more developed economies like Japan, Australia and Singapore, do not have regulations around privacy in place.  However, there is the APEC Privacy Framework which provides technical assistance to APEC economies that have not addressed privacy from a regulatory or policy perspective. In addition, each year, there are more countries, states and unions that are taking on privacy rules.

Marketers therefore have to be on top of the legislation and privacy issues in the countries they are dealing with so as not to risk running a-foul with the law and even more importantly, not raising the ire of its customers.

Transparency and Disclosure are Critical – Notice and the Ability to Opt-Out are Not Enough!

In reference to a study conducted by The University of Pennsylvania and University of California (Berkeley) recently, the Center for Digital Democracy has pointed out that privacy policies are often misunderstood and alone may be inadequate. Many respondents (63%) incorrectly believe that if a Web site has a privacy policy, it means that the site cannot share collected information about them with other companies without their permission. One reason for this misunderstanding may be that privacy policies are written in legalese that most consumers can’t understand. If marketers must get consumers’ affirmative consent to track their behavior for advertising purposes, the marketers will have to clearly explain the benefits to persuade people to sign up.

Privacy will Challenge Everyone’s Technical Knowledge

Exactly where Personally Identifiable Information should reside within a company or organization is a very important question that is constantly being asked today. The decision will not only make the difference between being in compliance with such standards as PCI (the Payment Card Industry data security standards), but can also have a huge financial impact on a company.

Permission or Consensual Marketing Really Does

Do you recognize this scenario? You have been charged with creating a business case as part of building your company’s strategic plan for 2010. So you do your research. You go to the Web to find out more about leading products and services that support your case, and will serve as the foundation to operationalize your idea. You download a white paper and attend a couple of webinars. You are careful not to introduce yourself because you are still forming your own opinions and thoughts – and you are not ready to speak directly to anyone just yet. But then it happens: a deluge of emails and phone calls from all the technology providers wanting to talk … even an invitation to connect via LinkedIn from someone you have never heard of, but who says he has the technical solution you are looking for.
 
Obviously, all these communications have not had the intended effect, and probably just served to annoy you. So the next time you, as a professional marketer, develop a sophisticated multi-channel marketing campaign strategy, ask yourself these hard questions about permission-based marketing:

  • Is the message authentic? Are all the materials, product information, embedded videos, and offers you put together really relevant to the prospect’s or customer’s needs?
  • Is the frequency dialed in correctly? Are you saturating people with too many e-mails and follow-ups before they are ready?
  • Most importantly, have you asked the prospect directly how you can help? Important questions here include: “Did the white paper you downloaded meet your needs? Could we provide any additional information?” In other words, have you genuinely asked for permission to communicate in the way that stimulates customers to participate in a dialogue in which they define the rules?

Make no mistake, customers are in charge these days. They can:

  • Filter you out
  • Search anonymously
  • Blog about their recent experiences with you
  • Broadcast to their professional network online to avoid you and your services.

Marketers today have to realize that privacy is a near and dear issue to all customers and have to incorporate this into all their CRM and eCRM initiatives/campaigns to ensure that customers are not turned off or driven away. Above all, marketers have to realize as mentioned, that there is more to privacy protection than legalese. Privacy policies have to be very clear and in a language that people can understand easily. For example, when using a capture form make sure that someone can quickly look at the form and really understand the implications of giving up that data. Be clear. For example, address the following: Will it be sold to third parties or will it be only for first-party communications?

eCRM definitely is on the rise, but it’s important to strike the correct balance between business needs and your customers’ privacy.

By Shanti Anne Morais

 

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