Identity theft is a scary proposition. In fact there are 15 million victims of identity theft each year. It is no wonder then that, either than a name, phone number, and email address, people are unwilling to give out any more information to companies with whom they do business. This can be difficult, as in order to serve customers better, most companies do need additional information.
When customers provide their personal information, there is a level of trust that they are giving – they are counting on your not to share or sell their information to anyone else or to use that information to “spam” them. And it’s important that you do not violate that trust.
Before you begin to ask customers for their personal information, it would be wise to put together a solid policy based on what you think you need and how both you and your customer will benefit. Here are 10 essential questions you should ask yourself.
Why do I need any information at all from my customers?
Marketing is no longer just advertising and making a sale anymore. Today, customers want to feel special. They want a relationship with the businesses they patronize. The only way for you to develop that relationship is to get to know your customers better. What specific needs to they have? And how can you personalize benefits and value to them based on their needs and preferences?
What kinds of personal information do I really need?
Of course, you need a name and an email address, perhaps a cell phone number. If, for example, they have ordered an item and shipment is delayed, you need a couple of methods of contact. Later, as greater trust develops, you might want to collect some demographic data, such as age range or profession and possibly marital status or children. This will help down the road as you plan personalized marketing for them. And it is always a good policy to be upfront and open about why you are collecting the information. You need to have a good reason for doing so, and they are more prone to give it to you if they know why.
What type of information do you want/need regarding records of their purchases?
There is hardly a company today that does not keep track of what customers have purchased, or, if online, even looked at. In this way, they can provide targeted advertising and recommendations on related products and services. If you have ever purchased something on Amazon, you know how this works.
How should I collect customer information?
You should try to get just a bit more information with each encounter and transaction. When a customer contacts your customer service department, this is often a good time to ask for a bit more.
Do not, however, go into chat rooms and other online venues and start collecting names and email addresses from total strangers. This is actually now against the law unless you get permission first.
How do I want to store the information I get?
The best solution is to you’re a CRM software solution. Some of them are relatively cheap and information is stored in the cloud so you never risk losing it. As the transactions pile up and/or your customer base continues to grow, these systems are far preferable than a spreadsheet you are trying to keep in-house.
How do I plan to protect customer information and data?
Encryption is pretty critical, especially if you are storing financial information. If you are not wholly expert in this area, hire someone who is or contract with a highly reputable security service that will both encrypt and store the data off-site.
Do I know the law regarding this?
One thing that you must do, if you are going to collect and store information, is to have a published privacy policy, that outlines what types of information you collect and why, and how you will protect that information. This is required by law. Special laws pertain to the health care industry and to children. And be certain that all of your employees follow the privacy policy.
How will I handle a breach of customer information?
Your customer has been injured by a failure of your system or the system of someone with home you have contracted. You must inform the customer immediately and show genuine concern, along with assurances that you will do all in your power to remedy the situation. As Jonathan Rosenfeld, personal injury attorney states, “Business owners need to appreciate that the tolerance for privacy lapses is shrinking. It’s only a matter of time before a case like this goes to a jury and a substantial verdict is handed out due to anger.”
Do I want to sell my customer information to someone else for marketing purposes?
You really want to be careful here. While many companies do profit from selling their customer lists, many customers become enraged. If you intend to do this, you must inform your customers in your privacy policy.
How will I benefit from the customer information I get?
If you can use the information to add value or benefit to your customer, then you are establishing a trusting relationship. You are likely to keep that customer and that will in turn boost sales.
Think through your purposes for gathering customer information. Once you answer the “why” and the “what,” you will be able to justify what you ask for.