With dot-com companies making a bundle off users' personal information, you may wonder whether you can do the same -- without alienating your customers.
After all, many of those efforts have gotten plenty of bad press. Earlier this year Internet ad firm DoubleClick Inc. was forced to postpone its plan to create profiles on Web travelers by combining data on their Web use patterns with their personal information. The resulting profiles, DoubleClick maintained, would help marketers better target advertising. Privacy-conscious consumers roared their disapproval.
Meanwhile, the government has taken notice. In May the Federal Trade Commission urged Congress to set tougher standards for collecting consumer information online. A separate bill that began making its way through the Senate Judiciary Committee last spring would require Web sites to notify consumers about what information they're collecting.
Are you still game to rent out customer data? If so, take heart: you can do so responsibly. (See "Getting Started," below.) For example, Boston-based music retailer Newbury Comics Inc. invites customers to join its E-Mail Club. Members get discounts on merchandise in exchange for letting the company track their purchases; the 21-store chain uses that data for merchandising and marketing.
Newbury Comics also e-mails club members information about promotions that are jointly sponsored by bands, nightclubs, concert promoters, and recording companies (for instance, alerting Foo Fighters fans about new CDs or upcoming shows). But those sponsors never get direct access to customers. "E-mails are always from Newbury Comics," says Trish Chapman-Kane, director of Newbury Comics Interactive. "We're not going to ever sell personal information or trade it with anyone."
Even though Newbury Comics charges its marketing partners nothing for the conduit to its customers, the mailing list still generates revenues: each of its 12,000-plus members pays $3 a year to participate.
In any case, businesses can share information about their customers without getting into trouble with them, says Andrew Shen, policy analyst for the Electronic Privacy Information Center, in Washington, D.C. The key: "Be very open about what you're doing and why."
The following are guidelines for responsibly sharing information about your customers.
Be up front. Whenever you collect information, tell your customers what you'll use, how you'll use it, who'll get access to it, and how you'll protect it.
Let them say no. Make sure customers know they can decline to provide data that may be shared.
Seek selectively. Consumers get nervous about providing birth dates, Social Security numbers, income figures, and details about their kids. If you don't need it, don't request it.
Get branded. TRUSTe and other Internet privacy organizations offer Web site "seals of approval."