As a modern business, it is crucially important that you build confidence and trust with your customers. Customers are concerned about privacy more than they have ever been. With consistent information leaks, concerns about how information is shared on social media, and more, customers have every right to be worried.

One way that businesses can catch and attract the attention of their audiences is to demonstrate their commitment to customer privacy. But of course every company says that customer privacy is of utmost importance, in the same way that hold lines say that the call is important to the company. Businesses need to support their claims in order for customers to believe that their data will actually be valued.

Why Is Customer Privacy Important?

Customers care about their privacy for many different reasons. First of all, 15% of consumers become victims of identity theft each year. While many consumers are able to recover the majority of any lost money and repair credit damage, this involves a huge time and sometimes financial investment.

Users also get concerned because of incidents such as the Facebook hack, where some 50 million users had their information exposed. Customers share an incredible amount of information online, and they expect that information to remain private.

Beyond any federal penalties that companies might have to pay when they improperly protect data, they risk losing customer confidence and damaging their own bottom line. Companies could even lose their businesses due to failures to provide adequate privacy and protection for customer information.

How Does Customer Privacy Affect Business Strategy?

Since customer privacy is so important to customers, it is crucial that businesses include privacy measures in their overall business planning. But how do companies make sure that they properly handle customer data?

What Can Businesses Do To Improve Privacy?

Private Servers

One key way that small businesses can protect privacy is by moving their website to a private server. A private server is an intermediate step between maintaining your own data storage and having a dedicate server. A dedicated server is expensive to maintain, and often contains more resources than a small to medium sized enterprise needs. But when a company maintains its website and data on a shared server, their data is vulnerable to an attack through any other node on the same server.

What a private server does is keep each company’s resources in a separate container. By segregating each container, no company can be affected by an attack on another company. This means that your company is protected from someone else’s poor security.


Letting customers know what you’re going to use in terms of their data is important. By being clear and forthright, customers can make informed decisions about what to share. It’s also important to give customers the chance to opt out of information they do not want to share.

Keep Minimal Information

One way to keep information safe is to keep as little of it as possible. Right now, the trend towards big data often means that companies collect and keep as much information as possible. They hope to use this information to gain insight into their customers and better serve them, increasing their bottom line along the way.

While this goal is understandable, the more data a company keeps, the more there is to lose. They make themselves a more tempting target to hackers and data thieves.

One way to reassure customers is to use a third party payment processor, rather than collecting payment information themselves. When companies do this, they don’t store any credit card information on their own servers; this dramatically decreases the business’s value to hackers and thieves.

Make Information Anonymous

Another important way to make information less interesting and better protected is to make it anonymous. It may be valuable to keep specific browsing information available for a few days, in case a customer returns to the site. Businesses can then choose to remove identifying information from the data. General information – what customers buy after looking at a set of items, for example – can remain useful, but a specific history of what a specific customer looks at can be removed.

Ultimately, while big data tells us that knowing what every customer could possibly want is good for business, few companies can afford the kind of computing power that allows for that sort of analysis anyway. Basic demographic information, however, is manageable for most companies. Knowing what websites customers tend to have visited before moving to yours, for example, makes it easier to target ads and even blog posts.

But customers need to have faith in your business in order for you to be successful. Businesses which aren’t willing to protect customer privacy often struggle, and may fail. By protecting data, businesses avoid expensive legal fees, significant penalties, and customer loss.