Economic pressures are driving enterprises to search for ways to squeeze maximum returns from their customer relationships. Many enterprises are testing just how much intrusion customers will tolerate. Although these efforts seldom violate enterprises’ own privacy policies, they can result in a backlash from customers, privacy advocates and the media.
Enterprises today realize they must respect customer preferences about handling personal information. However, careful handling of customer information often frustrates marketing efforts, since the enterprise can no longer directly contact customers who have “opted out” of company contact. Because of competitive and financial pressures, some enterprises have been cutting corners, and have frequently paid the price in the form of customer ire. Worst-case scenarios include lost sales, lost customers and potential lawsuits.
We review some examples of companies that have pushed the customer privacy envelope too far, and we suggest some best practices for avoiding customer conflict.
Changing the Rules
Best practice: Whether an enterprise uses opt-in or opt-out as the default says much about how it respects customer privacy. An opt-in default, which assumes that all customers have granted permission to be contacted unless they explicitly opt out, is a much more aggressive approach. Customers who have even a casual interaction with an enterprise can find themselves inundated with offers and e-mail. An opt-out default, although it limits the subset of customers available for contact, nonetheless communicates concern for customer preferences and helps identify the customer segment likeliest to respond to contact.
Breaking the Rules
In April 2002, Lycos sent e-mail to Lycos Network members who had opted out of Lycos’ Special Offer program. Lycos had made changes to the program, including the addition of a US$5,000 sweepstakes prize, which it felt would compel users who had opted out to reconsider. The e-mail included a link that, when clicked, would automatically reset the user’s opt-in settings for the Special Offer program. Even though users may have explicitly denied permission to be contacted, Lycos ignored the customers’ preferences for a “one time” contact.
Best practice: Simply put, a “no” is a “no.” It may be frustrating to be unable to contact customers in an attempt to influence their preferences, but enterprises must not violate their own privacy agreements. Other methods must be used to influence the customer without direct contact
Bending the Rules
Follow the Rules
Economic pressures are driving enterprises to search for ways to squeeze maximum returns out of their customer relationships.
Some companies have been trying methods to work around the restrictions they or their customers have put in place to protect their personal information. There is a growing trend within the general public to control and protect its personal information wherever it can exert control (for example, in business transactions).
To be successful, enterprises must understand how to achieve an appropriate balance between developing customer insight and maintaining the customer’s sense of privacy.
Enterprises should resist the temptation to sidestep the restrictions of their own privacy policies. In most cases, such attempts will translate directly into customer anger, bad publicity, and, ultimately, lost sales and lost customers. Respect the stated preferences of customers and be candid in communicating what data you are collecting and how you are using it. When in doubt, err on the conservative side.