So with all the controversy swirling around the privacy debate, what's the best way for entrepreneurs to earn trust from customers, yet gather the information they want at the same time? For starters, experts say Web sites that collect personal information from or about consumers online should comply with the four widely accepted fair information practices: notice, access, choice and security.
"Consumers don't mind giving information if they know it's going to be in the trusted hands of the company they're doing business with," says Silvana Gragossian, co-founder of DecorLine, an online retailer of original art and craft items. One of the first things this six-employee Encinitas, California, firm did when it opened in 1999 was construct a privacy statement.
Written with the help of a lawyer, the statement says DecorLine is committed to protecting the privacy of its customers and that the information collected on the site is used solely to process orders and enhance the shopping experience. DecorLine occasionally sends e-mail notices to customers, informing them of new services, products and special offers, so recipients are always given the chance to opt out. But few take DecorLine up on its offer. Gragossian, 37, says, "We rarely get a request for removal from a user."
Astrocenter.com Inc., which owns Center.com, a wellness portal in San Francisco, takes a different approach to consumer privacy. The site offers members free health, beauty and fitness information, along with personalized horoscopes and astrological reports. In its privacy statement, Center.com says it not only uses demographic and profile data to personalize services to match customer interests, but it also shares the information with advertisers on an aggregate basis.
The statement further explains that Center.com might share personal information with other companies. "Our customers can check a box that says they would like to receive special offers from our partners," says Jeremiah Rosen of Center.com. "If they don't want the offers, they don't have to check the box."
However, Rosen points out that even if members opt out of the offers, their information is still part of the site's database. The way he sees it, if consumers don't want their information shared, they can unsubscribe from the site. "We aren't trying to hide anything," he says. "It's clear that we sell advertising; how we do it is by selling information about our audiences." Given the site's 3 million monthly visitors, the model doesn't seem to deter customers.
Like eBay, you should explain that your policy may change from time to time. It's not a bad idea, especially considering the fact that laws may change. Customers should always be notified of any alterations and given the opportunity to notify you if they don't agree to the changes as described. Of course, that doesn't take away the need for customers-new or existing-to always be given the opportunity to opt out if they're not happy with the policy.
"You have to give customers a choice-it's their information," says Gragossian. "Customers come to your site and give you their information-so you just can't take that lightly."