Relationship marketing is important for the sustainability of your business, and with the potential and capabilities of the Internet, it is viewed either as the best or the worst way of interacting with your customers. The internet is a great technology for gathering data about your consumers and determining what they want and develop a good relationship with them. However, this same technology can get consumers to be concerned about their privacy. This is the summary of an article by Mark Brown and Rose Muchira. You can get the pdf of the behavioral targeting article here: Investigating the relationship between Internet Privacy Concerns and Online Purchasing Behavior.
It is important to collect data about your consumers, but it’s more important to use this data and not draw any concern from them. In fact, 10 percent of people who fill up online registration forms don’t give information about themselves. Whenever building relationships is involved, trust is very important, and that’s why they don’t give away information right away. One partner has trust for another when there is confidence in integrity and reliability. Privacy concerns are an issue for consumers if there is no trust.
Aside from trust, relationship also thrives with confidentiality. After trust, a consumer expects that their information is used ethically and kept confiedentially. Furthermore, it has been shown through research that consumers are more concerned about their information if used in other means than they are when it is used for relationship marketing.
When it comes to relationship marketing, the Internet comes full equipped with its capabilities of gathering data, and as such it has privacy implications at hand for consumers. Also, the internet has several tools which are valuable for consumers, such as being a customer support tool, a channel for distribution, sales, and a source for retrieving information.
Compared to other marketing channels, the internet is different in that it doesn’t have a control mechanism that is centralized, its communication and information processes are globalized, and data collection and creation is increased. All of these give the Internet an edge in obtaining consumer data as potential market information, and creating databases of consumer profiles that can be used by authorities and companies as well.
The fact that companies know a lot about these consumers heighten the concern among a significant portion of the population towards online privacy. Privacy ethics is very important; it is indeed a moral right and people should not allow their privacies to be invaded without permission. Those who sell products online should not use personal information from consumers without their consent.
Unauthorized Secondary Use of Data
Personal information has become a commodity. It is now being traded, sold and bought, and the importance of profiting has exceeded privacy, perhaps because it is now so easy to collect and link vast amounts of this commodity. Still, personally identifiable information is still very valuable for online users in terms of confidentiality (expect a rise in tools that provide identity theft protection), and one main concern for them is whether this information will have secondary use for companies, etc.
Companies can gain trust from their customers if they display privacy policies, and if they don’t, that can make them anxious about where their information is going or how it is being used. In fact, studies show that a significant number of users use false information for privacy protection.
Invasion of Privacy
When customers are concerned about their privacy, the strongest move that they can do is not buy from the goods a company is selling. This is especially true if an invasion of privacy occurs. Invasion can happen when a business contacts a customer several times even if the customer didn’t request it. This article hypothesizes that there is a significant negative relationship between a consumer’s the purchasing of goods through the Internet and ones privacy invasion experience online. Consumers can use services like reputation.com to make them feel more comfortable about their online information.
Surprisingly, the results of this article shows that there is no significant relationship between unauthorized secondary use of data and the purchasing behavior of online consumers. This implies that consumer’s are not as concerned about secondary use as expected. But this can also be due to the fact that the respondents of the survey used in this study are mostly young people, who are less concerned about privacy.
Another result suggest that indeed, when there is invasion of privacy, consumers are less likely to purchase products from an online business. Businesses should therefore carefully choose their communications, e.g. avoid spamming emails. Permission marketing should be put to practice.
Another result shows that there is a significant relationship between a consumer’s decision to purchase online, and his or her experience in the past. Specifically, that experience wherein the personal data he sent out was used or altered against his consent. However, generally, consumers are okay about their privacy being not put into consideration, if they can really benefit from doing so.