Privacy, Please

The importance of having a sound privacy policy

Even before went live, Bob Kopsell made sure the Woodstock, Illinois, vendor of event tickets had posted its privacy policy. "Because the Internet has the capability of gathering so much information about people, it was necessary to let them know what information we were gathering, why, and what we were going to do with it," says Kopsell, chief information officer of the start-up.

Privacy policies make good business sense. Two of three shoppers worry about privacy when online, according to a 1999 study by Forrester Research. Web users with serious concerns about privacy usually don't shop online at all, and those with moderate concerns spend 21 percent less than shoppers who don't worry about privacy, Forrester found.

The issue affects the vast majority of online shoppers and e-businesses, according to Christopher Kelley, associate analyst in Forrester's Technographics Data & Analysis division. "Nearly 90 percent of consumers want the right to control how their personal information is used," he says. The key to reassuring those consumers is simple: Have a good privacy policy.

Mark Henricks, author of Business Plans Made Easy (Entrepreneur Media Inc., $19.95, and Mastering Home Networking (Sybex Inc., $29.99,, writes on business and technology issues.

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This article was originally published in the September 2000 print edition of Entrepreneur with the headline: Privacy, Please.

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