Understanding Your Customers Without Alienating Them

Monica O’Brien is a guest writer from Twenty Set, a blog about personal and professional development for millennials. This is her first of hopefully many articles on YGG.

As consumers, we are careful of the type of personal information we give out and who we give it to. As an entrepreneur trying to market a new product or service, however, understanding your customers’ needs is essential. In an age where identity theft is rampant and telemarketers and spam mail are avoided at all costs, there are many consumers who would rather take their business elsewhere than risk privacy invasion. So how can you do marketing research on buyers’ purchases without alienating saavy consumers?

I believe there are two key characteristics of companies who will be able to collect useful marketing data without losing the trust of their customers - customer anonymity and company transparency.

Allowing the Customer to Keep Anonymity

Seth Godin recently wrote a post on his blog about how consumers don’t actually care about data collection as much as is believed. In it, he writes:

“There’s been a lot of noise about privacy over the last decade, but what most pundits miss is that most people don’t care about privacy, not at all.

If they did, they wouldn’t have credit cards. Your credit card company knows an insane amount about you.

What people care about is being surprised.

If your credit card company called you up and said, “we’ve been looking over your records and we see that you’ve been having an extramarital affair. We’d like to offer you a free coupon for VD testing…” you’d freak out, and for good reason.”

Any millennial can attest to this because 99% of us have accounts on Facebook, MySpace, LinkedIn, Twitter, and who knows what else. We don’t seem to mind, but when one of these companies started sending purchase recommendations to our friends, we freaked! Consumers are even more wary of sharing data with companies which are clearly selling to them, so how does this concept translate to retail businesses?

The key for a business that sells goods is to not collect any information that is “too personal” in over-the-counter transactions. Names, addresses, and telephone numbers are too personal as any of these pieces of information can lead to the other two. What many retail businesses are starting to do is ask for zip codes. Zip code demographics are readily available (thanks to census reports), so this one piece of information is actually very useful in marketing research. Stores could combine it with a gender value (no need to ask for that one) and have a pretty good idea of who their customers are. (By the way, I haven’t heard of any businesses actually collecting gender information, which makes me wonder, why not?)

As far as anonymity in an online business… well, there’s no such thing. Customers know this going into a purchase, but a company will earn respect by only using personal information for business purposes, like shipping an order.

Transparency With the Customer

People are more likely to give information if they know exactly what it is used for and see it doesn’t violate their privacy. If you run an online business, you should have a privacy policy and provide a link to it before checkout. Even better, explain why you collect each piece of information right when you collect it (perhaps a note on the form?) and make unnecessary information truly optional.

For example, most people have no idea why a phone number is required when purchasing something online, so they may assume it’s for unsolicited phone calls. It turns out many stores don’t intend to abuse this information at all, but rather use it to resolve incorrect shipping addresses or email addresses. Instead, why not make the phone number field optional and explain to the user why they should fill it in (to ensure order mistakes can be corrected easily), but give them the final decision.

Also, forget about the automatic email list sign-up when people make a purchase; it’s the best way to get on the spam block list. I get so irritated when I buy something online and get 20 coupon/promotion e-mails the next day, and I’m sure many other people do too. Instead, have /opt-in email lists/ and send e-mails only a few times a month.

For brickfronts, in-store clerks should be trained about the information they are collecting and the approach in which they should do so. Say a store is asking for a zip code on purchases - each clerk should know how to respond to the question “Why do you need my zip code?” The transparent answer would be something like, “Providing your zip code is completely optional and anonymous. We only use the information to better understand our customers’ needs.” People may decide not to provide their information, but they will appreciate the honesty. In that case, following up with a polite “No problem sir/ma’am” will show respect for the customer’s wishes and keep their respect for your business.

Above all, businesses must keep their promise not to abuse or resell any information collected. There is a huge advantage for companies who collect information and don’t use it to “surprise” people, but rather offer people better features and services. An example is Google, who probably has more information on people and their search/purchase habits than any other company in the world. As technology advances and data becomes easier to collect (and abuse), the businesses that will last are the ones who can earn consumer trust, and keep it.

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