Q&A: How treating customers’ privacy with respect can boost the bottom line

By Byron V. Acohido

In early 2010, Mark Zuckerberg, founder of Facebook, brashly announced that “privacy is no longer a social norm.” Not to be outdone, Eric Schmidt, then Google’s CEO, a few weeks later boasted that “the Google policy on a lot of things is to get right up to the creepy line and not cross it.”

Those proclamations signaled the degree to which Americans had so easily abandoned long-held, hard-won notions of personal privacy. Indeed, lack of privacy has come to be accepted as the required price for participating in an internet-centric economy.

But the pendulum may have started swinging the other way. A recent consumer survey, conducted by the legal firm Morrison & Foerster, shows that many consumers actually really do care about privacy.

Related infographic: Privacy concerns influence consumers’ buying habits

ThirdCertainty sat down with Eric Hodge, director of consulting at IDT911 Consulting, to discuss the ramifications of this development. IDT911 sponsors ThirdCertainty.com.

ThirdCertainty: Is Zuckerberg still mostly right about Americans not caring about privacy?

Eric Hodge, director of consulting at IDT911 Consulting

Eric Hodge, director of consulting at IDT911 Consulting

Hodge: Mark Zuckerberg has a vested interest in privacy no longer being a social norm. The more rights he has to use the mountain of data sitting in Facebook, the more money he is worth. Of course, people are growing concerned. What’s scarier than a faceless bad guy stealing from you or ruining your reputation from 9,000 miles away? What’s more terrifying than having your identity literally stolen from you?

3C: Is there a generational component to our attitudes toward privacy?

Hodge: Older generations can’t help but say that the younger ones have no sense of privacy when it comes to using technology to share personal feelings or events or even embarrassing photos. But the same young person who shares racy Vines of her night out on the town knows better than to send her credit card number in an unencrypted email or give her password to someone over the phone. These are two really different kinds of privacy, and Zuckerberg may be mixing them up.

3C: The Morrison & Foerster poll shows consumers appear to be concerned about government intruding on their privacy.

Hodge: I was struck by consumers’ relative lack of trust in the government. After all, the vast preponderance of payment data, personally identifiable information and health information resides in the private sector. The majority of breaches making headlines are in the private sector, as well.

People should understand that, unlike Facebook or Amazon, the government has no motive to sell your data. My firsthand experience is that the government does a better job with privacy than the average merchant or service provider. Maybe the government needs a good PR person?

3C: Has the time come for companies to factor privacy into their business models?

Hodge: Acknowledging and respecting consumer privacy is now part of decent customer service. It is also one of the best ways to avoid regulatory risk and reputation risk. I worked with a small, regional supermarket that wound up on the ragged edge of solvency because of the fines they were paying to Visa for difficulties complying with privacy rules under the Payment Card Industry Data Security Standard (PCI DSS.)

I’ve also worked with an online retailer who saw their business take a real hit for several months after a data breach was publicized. Privacy exposures can present a significant risk and should be factored into risk assessments.

More stories related to privacy:
Companies must not forfeit privacy in march of technology
Fair or foul? New forensics tools raise privacy concerns
Apple has good reason to protect your privacy

This article originally appeared on ThirdCertainty.com

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