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Privacy, Please

The importance of having a sound privacy policy
September 1, 2000
URL: http://www.entrepreneur.com/article/31188

Even before TicketsNow.com 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, www.entrepreneur.com) and Mastering Home Networking (Sybex Inc., $29.99, www.sybex.com), writes on business and technology issues.

The Rules

A good privacy policy should cover questions anybody visiting your site might have. Tell people what's being gathered, by whom and for what purpose. Visitors should also be told their options for participating in your information-gathering. Your privacy policy will need to address the following:

Reveal what personally identifiable information is being collected through your Web site, including that which is automatically collected when users log on. TicketsNow's policy, for instance, states that it collects information on visitors' Internet addresses and browser types to help with site maintenance.

Identify the particular business collecting the information. TicketsNow provides its name and address and lists Kopsell's personal e-mail address and phone number.

Tell your visitors how the information will be used. TicketsNow's policy explains that it collects addresses and other information for shipping and billing purposes, in addition to the Internet address and browser information. Let visitors know whom you may share the information with, if anyone. TicketsNow promises not to reveal customer data to anyone else. Inform visitors about choices they have concerning the collection, use and sharing of that information. TicketsNow informs customers that they don't have to register and provide personal information in order to use the site. It also lets them register while opting not to receive newsletters or other e-mail.

Describe security procedures used to protect visitor data from loss, misuse or alteration. TicketsNow describes its industry-standard secure server and encryption methods.

Let them know how they can view the information you have collected on them and correct any inaccuracies.

Be Flexible

TicketsNow's policy is just one of many approaches to privacy. Be ready to adapt standards to your business and your customers. Privacy is obviously a bigger concern with certain kinds of companies, such as financial- services providers.

Some companies' customer information is more valuable as well. For instance, TicketsNow could easily sell member e-mail addresses to vendors hoping to e-mail special offers to customers. Kopsell opts not to. He points out, however, that his policy allows him to send e-mail to customers about companies hawking T-shirts, CDs, restaurant certificates and other related items-if members give their permission. "I left room for growth in our policy because I don't want to have to change it later," he explains.

Having a privacy policy doesn't mean abandoning the ability to use knowledge about customers. But it does mean respecting their right to privacy and treating them as Kopsell does: the way he would like to be treated online.

Seal Of Approval

You can download a fill-in-the-blank privacy statement at Truste.com, a nonprofit organization in San Jose, California. TRUSTe.com certifies e-businesses' privacy practices and issues a seal they can display on their sites. Truste licensees include About.com, Netscape, Real.com and many start-ups.

Contact Sources

Forrester Research Inc., press@forrester.com, www.forrester.com

TicketsNow, (800) 927-2770, www.ticketsnow.com.