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Defining privacy

The understanding of privacy varies throughout an enterprise. The "sure-fire" insurance against privacy abuse is a company-wide culture of treating people like you want to be treated.

Protection of customer intelligence requires a commitment to safeguarding your customers' privacy. Information needs to be protected and companies need to stay trustworthy to both current customers and potential customers. Common sense, right? Then why is privacy still thought of as a secondary compliance or litigation issue?

One reason: privacy means different things to different people within an enterprise. Employees have separate responsibilities, and therefore think of privacy related to how it affects their daily jobs.

At the executive level, the company privacy policy is thought of as an insurance policy against the kind of security breach or information abuse that could develop into a public relations disaster. For many businesses, a serious privacy breach could be fatal for the company, or nearly so, especially with strong competition and consumers' heightened awareness of privacy issues.

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Like insurance, committing funds to protect privacy is a risk-based investment. Firms invest in privacy initiatives out of necessity, hoping they never have to cash in on it. Not having to cash in means that customer data is being protected and customers are satisfied. Implementing a privacy program reduces risk, which improves a company's reputation, unless something goes wrong.

Elsewhere in the company, the legal department has its own spin on privacy. In the U.S., compliance with laws such as Gramm-Leach-Bliley, Can Spam, HIPAA and others are their focus. Similar regulations govern the use of personal information outside the U.S. So the lawyers want to do whatever is necessary to avoid litigation, either with the government or with customers.

Value comes from customer-facing staff Most often, it's those who deal directly with customers who are first to see the business benefits of protecting privacy. For those whose mission it is to build the customer base, privacy involves:

  • getting information from only the customers who are comfortable giving it
  • using information to build mutual value with each customer
  • protecting information as a primary competitive advantage

When a company has the right customer-oriented culture, its front-line employees will be willing to do whatever it takes to ensure the customer thinks of them as trustworthy.

Current industry snapshot Privacy efforts differ based on who in the firm leads the charge. If privacy is an executive's responsibility, compliance and risk assessment tend to be top priorities. In our experience, executives haven't drilled down far enough to think of customers as deeply as the database or marketing people do. That's understandable, because they need to think of the bottom line, and the proof isn't quite there yet to see a positive return.

There are exceptions, however. Last Christmas Earthlink's CPO, Les Seagraves, sent out a communication to customers and the public with 10 steps consumers can take to protect themselves from identity fraud. It was his way of showing the ISP's commitment from the top to consumer protection.

A company's only sure-fire "insurance policy" against privacy abuse is a company-wide culture of treating customers the way you'd want to be treated yourself. Firms must have "customer trust" in their corporate DNA, otherwise, the policy will always have loopholes, and sooner or later an accident will happen that isn't really "covered" by the policy.

Copyright © 2004 Carlson Marketing Group, Inc. All rights reserved. Peppers & Rogers Group is a Carlson Marketing Group Company.

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