“Trust is earned. If you can do that, people will share more data, which in turn leads to better data.”
When I read this statement by Larry Poneman of the Poneman Institute, I immediately thought, “What kind of Pollyanna world is this guy living in?”
Poneman’s insights were detailed in “Insights and Privacy,” a recent article by Michael Risse, General Manager of Midmarket Business in the US Small & Midmarket Solutions & Partners Group for Microsoft.
Michael writes:
“It is one of the great paradoxes of technological society. At the same time we have enacted laws designed to keep information private (such as HIPAA for the healthcare industry and Graham-Leach-Bliley for the financial services industry), we have also enacted laws designed to make certain information public (such as Sarbanes-Oxley).
Customers like personalization but will only submit to it after you’ve developed a relationship with them. A similar paradox extends into your customer relationships. To give customers better service and to develop better product offerings, you need to know more about their preferences. But even though customers want better service, they may be loath to give you personal information.”
He then introduces Poneman, who offers his insight on segmenting U.S. consumers into three categories: privacy-centric (15 percent), privacy-sensitive (65 percent) and privacy complacent (20 percent).
Poneman: “The complacent don’t care much; the sensitive will stop doing business with a company if something truly awful or offensive has transpired. But, perhaps most important, the privacy-centric will stop shopping at a particular store if there’s a privacy breach.
Ok – I’ll buy that rationalization as long as he can back it up, which he does:
“There is a high, though not a one-to-one, correlation between the privacy-centric and high-income demographicspresumably because they have more to lose. It may be only 15 percent of consumers overall, but if it’s 30 percent of your customers, not honoring their wishes and treating their privacy according could represent a lot of lost business.”
How do you feel about this? Working in a service industry with access to client information, we are always diligent in maintaining confidentiality of our client’s information. As technology integration increases, we will continue to see challenges in this area.
Good food for thought. If we sold widgets, we’d be more concerned about privacy, but we sell our services, which brings with it a whole new set of criteria.
