Customer Concerns About Privacy Matters To Your Business More Than You Think


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Customer concerns about privacy, especially online, are steadily increasing. Most customers know that websites track and store a certain amount of information about them as they enter and browse. They see this reflected in the ads they are served on social media and other platforms. They also hear about how this data can be misused. High profile cases at the government level have also raised concerns about what data may be collected in our own homes, and how it may be used.

In 2014, 9 out of 10 Americans felt out of control of their own data, according to Pew Research. Companies which can help people feel that they are more in control of their data and privacy can encourage brand loyalty and overall company reputation.

So what are the benefits of protecting customer privacy?

Customers perceive you as trustworthy

The first, and most obvious, benefit of protecting customer privacy is having customers perceive your company as worth trusting. Customers realize, more than ever, how much data they share just by logging onto a website. When a business is up front about what data it is collecting and how that data will be stored and used, customers can feel safer using the website.

Customers will be more loyal

When customers perceive a company as trustworthy, they are also more likely to return to the site. They may shop more often, consider the website to be more of an authority on its field, and be more likely to recommend information from the site to others interested in the topic. This helps companies build a loyal customer base who will not just shop at the business but advocate for the company to their friends.

Legal ramifications

There’s also a very practical reason to protect your customers’ information: there can be legal ramifications if you don’t. The most obvious example is when companies are hacked and identifying information is stolen; companies often have to pay significant damages, often in the form of paying for identity protection for customers for a certain amount of time.

There are also the less obvious degradation of trust issues that occur when businesses lose information in this way, especially when they take a long time to disclose the breach. Failing to disclose the breach promptly and properly can also cost the company in terms of fines from both state and federal governments.

How to protect customers

So if maintaining customer privacy is so important, what can be done to try and protect customer information?

Consider Virtual Private Servers
A virtual private server is a way to operate programs in the cloud instead of on physical, dedicated machines. They are a great step-up opportunity for small to medium sized businesses who need to have some level of data hosting without being ready for the cost of managing a dedicated server.

By hosting data online, businesses avoid some of the most common vulnerabilities that make systems accessible to hackers. It’s easier to remove access for users who are no longer with the company; managing permissions is simpler; you don’t have to worry about whether or not individual users are maintaining proper anti-virus updates. This can be a very cost effective solution to keep data protected but accessible when needed.

Encourage high quality passwords

Companies often encourage people to create passwords that are random numbers and letters, and use specific rules (one capital letter, one symbol, one number), but these rules actually make it even easier for computers and hackers to guess our passwords. Instead of relying on those older methods of password creation, look to newer ways to create passwords that are easier for people to remember and harder for computers to guess.

Only store what is needed

We have entered an age of big data, when companies are using the immense amounts of data they have collected to offer better service to customers – or so we hear. But how many companies are really using all the data they’re collecting? It’s important to understand that the more data you collect and store, the more potentially vulnerable your business may be.

As a company, you need to make a choice: what information do you really need to store? Would your company be better off letting certain pieces of information go so that there is less potential liability?

A great example is using a payment processor instead of directly accepting payments. By encouraging customers to pay with a service like Paypal, an e-commerce company is no longer responsible for storing a customer’s payment information. This makes them a less interesting target for hackers, and eases their potential risk in the long run.

Make as much data anonymous as possible

For years, companies have used cookies online to track customer activity and get information about what they’re doing online. This has been used to understand how customers act, both before and after they’ve visited a particular website.

One way that businesses have begun to change behavior to protect customer privacy is to make collected data anonymous as quickly as possible. Basic demographic information may be retained, but details like IP addresses and other identifying information are removed. This lets companies get the data they need to make solid business decisions while removing the personal information from the equation.

Protecting customer privacy is a good business decision, both in the short term and in the long term. Companies can find the right ways to support their customers without putting them at risk. This will benefit both the business and the customer, build customer trust, and avoid exposing the company to financial liability over time.

Margarita Hakobyan
CEO and founder of, an online marketplace of local moving companies and storage facilities. Business women, wife and mother of two with bachelor's degree from the University of Utah with a concentration in International Studies and a Masters Degree also from the University of Utah with a degree in International business.


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