Recent studies show that customers are increasingly concerned with how companies collect, use and safeguard their personal data. In fact, many consumers now say that, if a company isn't up to par on its data policy, they'll happily spend their money elsewhere.
Clearly, this means that businesses that collect data from customers need to take a long, hard look at the policies they have in place for using and storing this data. But how should companies go about developing a data policy that meets consumers' growing demand for greater privacy and security? [Keeping Customers Means Keeping Customer Data Safe]
In an email interview with Business News Daily, Meyar Sheik, a data analytics expert and CEO of Certona — a personalization and revenue optimization provider for online retailers— explains how businesses of any size can keep collecting the data they need without turning off customers.
Here are five tips for creating a data policy that everyone can agree on.
Take only what you need. Sure, collecting information about your customers can pay off, but Sheik said businesses should remember that when it comes to data, less is more.
"There is no excuse for violating consumer privacy. Yet, some brands still cling to the big data mantra that more is better," Sheik said. "The truth is that retailers, or other businesses, don't need to collect any data that a consumer doesn't want to share."
Don't make it too personal. Collecting general information about your customers is one thing, but attaching that information to a face and a name is quite another. As Sheik points out, data analytics can offer incredible insights without collecting any personally identifiable information.
"With the right tools and technologies, brands can offer exceptional services to customers and still create personalized experiences without collecting data specific to an individual," Sheik said.
Be transparent. In the future, Sheik predicts that all brands will either have to embrace a transparent approach to their data collection and targeting practices or risk losing customers.
So how should you approach data collection? It's simple. Just ask before you take. While some consumers might opt out of providing their information, others will happily agree. Either way, it's better to ask for permission than to beg for forgiveness.
Prepare for the worst. Data breaches happen. In fact, lately they've been happening with increasing frequency. And even if your business is significantly smaller than Target or Neiman Marcus, that doesn't mean you won't become a victim of a security breach. As Sheik points out, the fallout from a breach can actually be worse for small businesses than for large companies.
"A single violation has the potential to break a brand's reputation and bank account," Sheik said. "Businesses must future-proof their systems and protect customer data from the onset. This is critical for companies of all sizes."
Put customers first. To make Big Data work for everyone, businesses shouldn't just ask themselves how they can benefit from the data they collect, but also how this data can improve the experience of their customers. Having a data policy that reflects this idea is a good way to keep the security of your customers' data at the forefront.
"Customers want to be entertained and engaged with their favorite brands and will gladly offer their data as long as the exchange is mutually beneficial," Sheik said. "Personalization technology can pull the invaluable user data that will improve customer engagement, while security technologies should be implemented to prevent a data breach from occurring."
Originally published on Business News Daily.