Claudia would like to thank John Geiger for his contribution to this month's column.
Think about how your mother would react to the following phone call from her bank: "Hello, we understand that one of your jumbo certificates of deposit will be maturing soon, and we would like to meet with you to discuss your options." Do you think she would be pleased to get this call?
The answer is that it depends on who is making the call. If her bank has already established a track record of discussing investment options with her in these situations and if her bank's investment advisor makes the call, she might be quite pleased to receive it. However, how would she feel if the call came from an independent investment advisor that she did not know? Receiving this call from anyone but her bank would cause her strong displeasure. If she suspects that the bank provided that information, the bank's relationship with her will be tainted at best and terminated at worst.
The distribution of confidential information to a third party without the express consent of the customer is a clear violation of the customer's trust in the organization. Trust is established over time through positive interactions with an organization. These interactions take place with the extended enterprise, which is at the center of the customer life cycle the decision-making process that all consumers go through in making a purchase. Between the enterprise and the customer sits a key layer that is critical to ensuring that the customer stays in the your customer life cycle trust. Trust embodies the customer's confidence in the enterprise's integrity.
According to Webster's Unabridged Third New International Dictionary, privacy is the "quality or state of being apart from the company or observation of others" and entails "freedom from unauthorized oversight or observation." The key word in the second part of the definition is "unauthorized." Privacy does not necessarily exclude oversight or observation, but it does require that such actions be properly authorized. Enterprises build loyalty when their customers trust them enough to give information that will enable the enterprise to provide personalized service.
Why is privacy such a big issue? Following are reasons why some individuals want to preserve their privacy:
People value their time. Most people do not appreciate receiving unwanted telemarketing calls, "junk" mail, "junk" faxes or unsolicited e-mail. These are forms of harassment and are an invasion of privacy.
People don't want to be incorrectly grouped. Demographic information is often combined with individually identifiable information to include or exclude people in specific groups, and decisions about how the people will be treated may be based on the group in which they are placed.
People want to avoid embarrassment. They may do some things in private that they would not do in public. For example, many hotels that provide their guests with the opportunity to purchase a movie indicate that the name of the movie does not appear on the bill. This provides an illusion of privacy, and people may feel that their movie selection is private.
People want to prevent unauthorized use of their credit cards. Credit card information is provided for e-commerce transactions, and people are often hesitant to provide the information without proper assurances. Amazingly, most people don't hesitate to give their credit card to a waiter who disappears from sight for a few minutes. Precautions against unauthorized credit card use should not be limited to e- commerce.
People want to feel physically secure. People often go to great lengths to hide their true worth. Public knowledge of a person's wealth combined with information about their children's school could place the children in danger.
Introducing a third party into the privacy equation brings with it some complications. From our perspective as the supplier, we need to be careful about the information we share because it may lessen our competitive advantage. From the customer's perspective, we need to ensure that the customer has the same level of trust in the extended enterprise as he has in our company. At a minimum, if the information being shared might be considered confidential by the customer, we need to provide the customer with confidence that the third party is also obligated to protect the customer's privacy.
The length of time that information may be retained is also of interest to some customers. Customers may be willing to provide information for use in a particular transaction, but may not be willing to have that information permanently stored. If information is only needed for a transaction, then alerting the customer to the retention policy may further the trust the customer has in your company.
Ownership of the customer's data is another area of sensitivity. When a customer makes an online purchase, the customer willingly provides the seller with information. Further, the transaction itself consists of mutually provided information. Regulations do not grant the customer ownership or, more importantly, exclusive ownership of the transaction information. If the seller is interested in building a long- term relationship with the customer, however, the seller may wish to enable the customer to retain some level of control about how the information is used. For example, the seller may permit the customer to dictate whether or not the transaction can be made public.
CRM is built on trust. As we move customers through the customer life cycle, we use that trust to strengthen the relationship and the customer's loyalty.
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