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How to Collect Customer Data, and Respect Users

| Jun 20, 2014 No Comments

Gathering customer data has always been a difficult balancing act for private companies. Customers embrace services such as Netflix, which serve up tailored recommendations based on user history. Collect too much information, however, and your company can appear intrusive and untrustworthy. Given the importance of customer and user data for business intelligence, it’s important to establish guidelines for companies looking to collect such information, without angering their patrons. Drawing on a wide variety of industries, we’ve outlined a few important rules for companies to remember.

Provide incentive

One way for companies to gather data without being seen as invasive is to provide consumers with a useful service. For instance, many personal trainers encourage their clients to use a wearable activity tracker such as a FitBit so that they can track their daily activities. According to the New York Times, the device allows trainers to see “who stayed up too late, who has hit the gym—and whose only steps have been to the office vending machine.” Clients allow trainers to access this personal information because they know it will ultimately keep them accountable. In turn, this accountability will help them lead healthier, more active lifestyles. Because they can see a direct benefit, users don’t mind sharing such personal information.
Another successful example is businesses that offer customer loyalty cards. The loyalty cards enable businesses to track customer purchases and their favorite shopping locations, and in exchange provide discounts and recommendations. Again, both customers and business owners benefit from this arrangement.

Be transparent

It’s also important to be open and upfront about the information that your company is collecting. Nissan, for instance, collect information through its Leaf car, such as vehicle performance info and driving patterns, but lets consumers know exactly what they’re doing. Inc.com reported, “Nissan reports the information back to the drivers so they can see how their performance compares with other Leaf owners. The practice engages the consumer and helps Nissan learn lessons about its car that can be applied to making future models better.” Rather than collecting customer data and hoping no one notices – a surefire way to undermine trust- companies benefit from being upfront with their customers.

Focus on the user

According to Inc.com, few consumers object to private companies gathering information for marketing purposes as long as they benefit from the information that’s gathered. Consumers rarely protest about websites storing their information, for instance, when it results in a better user experience. Netflix, Spotify, and a host of other online services all largely rely on such value propositions. Few consumers have a problem with this type of data mining because it results in accurate product suggestions. Convenience, it seems, often trumps security.

Companies can maintain a positive brand image while collecting data by being transparent about what type of information they are collecting and what they are doing with the data. Such honesty will keep consumer trust intact. Shane Green, CEO of Personal, a digital identity management firm, encourages businesses to be open with their customers: “Tell customers what data you’re collecting, why you’re collecting it, and what you’re going to do with it.” This kind of transparency will prevent businesses from getting embroiled in potential scandals if consumers discover they are secretly mining data.

Through being transparent and providing useful services to their customers, businesses can collect customer data without upsetting users.

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