Companies that aren't careful about how they collect and use customer information risk doing more harm than good. There's a fine line between aggressive one-to-one relationship marketing and invasion of privacy, says Stephen M. Silverman, owner of a men's apparel chain in North Dakota.

You can find your customers' addresses through their credit-card numbers. And you do need addresses to send out customized mailings. But it's not worth the risk of angering customers. You can ask customers for their address when you write up a purchase, but doing so may trigger fears of ending up on multiple mailing lists.

Credit-card siphoning isn't the only way to offend customers' sense of privacy. Imagine telling a salesperson that you're looking for a gift for someone you're dating, unaware that the details will be typed into a database. Long after the relationship has soured, you stop by the store--only to be greeted by an unfamiliar salesperson making suggestions for romantic gifts. Some customers are put off by a store's tracking of even basic information, such as birthdays or clothing sizes.

So what's a retailer to do? What's called for is sensitivity to customers who are offended by information gathering and careful records in your database noting their preferences. It also helps to train salespeople to put customers at ease before asking for an address--and to back off if a customer shows any reticence.

Copyright 1999 G+J USA Publishing