While this is excellent news for small businesses because it helps them connect with these customers more than ever, what if this information gets into the wrong hands? This article will discuss the importance of customer data and how businesses can collect it ethically, and other protections that they can utilize to keep their customers’ information safe.
Collecting Customer Data — The Right Way
Customers are likely to be understanding if they know that businesses are collecting their data to provide better customer service.
However, companies need to follow specific guidelines to build trust and avoid turning off customers who may feel like the business is spying on them or taking advantage of them. The first step a company can take is using an opt-in process for any third-party apps used, which requires users to allow access to sensitive information such as contacts, photos, etc.
When businesses utilize personal information to perform data analysis, companies should also treat personal details responsibly by limiting how much information employees have access to and ensuring there are policies in place, so only relevant people get the data they need — not everyone at every level of the company.
Companies should also keep their employees up-to-date with any changes in privacy policies and ensure they are not sharing information directly from customers’ social media accounts without permission.
The Importance of Ethical Behavioral Tracking
Behavioral tracking is another great way for businesses to understand their customers better and improve the customer experience.
However, when tracking is done incorrectly or without consent, it can be seen as intrusive. Companies can do this ethically by having transparent privacy policies in place. Hence, customers know what data is being collected about them and how it’s being used online and offline.
Businesses should also ensure they’re not collecting personal information such as credit card numbers or social security numbers unless necessary. These details put people at a higher risk of identity theft. In addition, customers may be more willing to give up some behavioral data if they feel the benefits outweigh the risks, especially if there isn’t an alternative method yet (such as browser plugins).
Understanding the Dangers of Data Breaches
While businesses need to know their customers’ preferences and behaviors, they also need to ensure that the data is protected against breaches. The best way this can be done is by using strong encryption methods such as SSL/TLS protocols when collecting or sharing information online and ensuring all of a company’s devices (computers, laptops, mobile phones) are kept up-to-date with software patches and updates. It’s equally important for companies to practice good password management — having unique passwords across accounts helps ensure protection if one account gets breached while allowing more convenience since you won’t have to remember multiple complex passwords.
In addition to protecting customer data from hackers trying to break into servers, employees who are negligent with security measures may also put customers at risk of having their data breached. This can be done by using weak passwords or downloading unsecured files onto devices that may get stolen, hacked into, etc. Therefore, companies need to train employees to keep information safe and address any security concerns they have so everyone feels comfortable about protecting sensitive data.
The Correlation Between Data Collection and Customer Trust
While customer data can be an excellent tool for companies, it should only be collected to provide a positive experience. Suppose customers feel like they’re being spied on or that their privacy isn’t respected. In that case, they may choose other more transparent brands about how they treat information and make sure any data collection methods used are ethical.
It’s also crucial for companies to be upfront about what information they’re collecting and why and provide customers with an option to opt out of data collection if desired.
Data breaches can significantly impact customer trust — sometimes even more than the actual breach itself. When sensitive data is exposed or stolen from servers, recovering from the damage caused can be challenging. Customers may experience identity theft, credit card fraud, and more. Still, it’s also vital for businesses to communicate with their customers right away about what happened and how they plan on minimizing any additional risks moving forward.
Customer data collection can be an excellent tool for businesses to use as it helps them understand their customers better and improve the customer experience. When done correctly with clear policies in place about what data is being collected, how it’s used, and why, this marketing method will help your business grow exponentially. However, suppose you’re not transparent or ethical with your plans to collect information from people online or offline. In that case, they may choose other brands that are more upfront about respecting personal privacy rights.