The Privacy Revolt: The Growing Demand for Privacy as a Service

03/18/2015 01:03 pm ET | Updated May 18, 2015

thumbnailThere's one thing just about every company has in common right now. Without even necessarily meaning to, they have in some way become the proprietor of a new kind of wealth. I'm referring of course to their customers' data. But the flip side of acquiring that data is that your customers now hold you to certain expectations -- namely that you're taking steps to safeguard their privacy.

So let me put it simply: No matter what market you're in, no matter what service you provide or product you sell, from right now until the end of time, you're in the privacy game. Welcome.

What are you doing to provide privacy as a service (PaaS)? This is a service that consumers increasingly view less as a bonus and more as an absolute necessity. How are you preparing for the coming privacy revolt? Because it is coming. Pay attention to the signs so that you can have a strategy in place before it's too late.

The State of Privacy

As companies large and small, not to mention government agencies, are hacked, consumers of all ages are becoming increasingly aware that their growing dependence on technology has come at the expense of their privacy. With every ad we click, product we purchase online, and website we browse, we leave a digital trail, and we paint a picture of ourselves for anyone who has the means to see.

Even if you are one of those people who eschews social media and resists the temptation to document your life online, you can't escape the big data gobblers that have insinuated themselves into every aspect of our lives. Companies across all industries are using technology to collect data on you. Think about it:

  • Your smartphone continuously tracks your whereabouts. Beyond that, your service provider can access all the information you have stored on your device, including your contacts' information and how often you receive or send a text.
  • Smart grids track your energy usageand collect details about your life -- from your daily routines to the appliances you use.
  • Insurance providers will offer you a discount if you let them track your every move while driving.
  • The healthcare industry is pushing for devices that would allow doctors to collect data on you outside the doctor's office. For example, Apple recently launched its HealthKit platform, which allows doctors to collect real-time data from iPhones and Apple devices.
  • Companies, using browser fingerprinting, cookies, authenticated tracking, cross-device tracking and other methods, are monitoring your online activity and using that data to send you targeted ads.

Those are just a handful of ways you are being tracked. So unless you're willing to live completely off the grid, someone, somewhere, is compiling a profile of you. Creepy? That's one way to look at it. A fact of modern life? No doubt it is.

What Does This Mean for Business Owners?

You don't have to be a rocket scientist to understand that consumers are increasingly growing concerned about their privacy. Large-scale data breaches that have allowed consumer data to end up in the wrong hands have fueled the fear. The recent high-profile attacks on Anthem and Target (to name just a couple) have shown that this is truly a pan-industry problem. Predominantly, however, people are worried less about malicious hackers and more about what companies are doing with all the data they collect. What are you doing to assure your customers that you're acting in their best interests with the data you collect on them?

Those concerns are legitimate, because in many cases the reasons companies collect the data in the first place is paltry compared with how valuable the data actually is. Without consumers' knowledge, wireless providers, app developers, online retail stores, insurers, and basically anyone else can sell the data to the highest bidder.

The backlash is beginning. According to a Harris Interactive and TRUSTe, Inc., study, 84 percent of consumers are less likely to click on an online ad, and 74 percent are less likely to enable location tracking. In addition, a full 89 percent won't do business with a company that doesn't do a good enough job at protecting them online. And 76 percent are likely to check websites and apps for a privacy certification seal.

All that points to one thing: Consumers are wary, and businesses will suffer tremendous losses if they fail to build consumers' trust and confidence in the organization's ability to protect their privacy. They are going to expect privacy as a service (PaaS), and if they don't get it from you, they'll go looking elsewhere.

I recommend that you take a long, hard look at how you are collecting and using customers' data. Why are you collecting it?  Why is it important to your business? How do you use it? And do your customers want that?

Follow this advice to build consumers' confidence in your ability to protect their privacy:

  1. Put security measures in place. Hire the right IT people, invest in top-of-the-line equipment, and train your employees to follow protocols. If you haven't taken the proper precautions, you can't protect your customers. It's that simple.
  2. Be transparent. Tell customers how you collect their data and how you plan to use it. Rather than bury your disclosure in some long-form policy that people don't want to read -- or can't understand -- make your language simple, straightforward, and easily viewable. Go a step further and share details about all the measures you are taking to protect customers' information.
  3. Collect only what you need. You send up a warning flag when you ask for too much information for simple online transactions. Ask consumers to share only the information that is required for them to do business with you.
  4. Offer customers a choice. Verizon, for example, recently announced that it is allowing customers to opt out of its online advertising campaign completely, so even it's "supercookies" can't track users' activity.
  5. Don't sell customers' data. If you can't stand the thought of losing that source of revenue, think about the income you will lose when your current customers defect because they feel you have violated their privacy rights. Imagine the potential customers who won't do business with you because they don't trust you.

The privacy revolt is starting, and as more consumers become fed up with unsolicited ads and questionable marketing techniques, they'll turn to tools that help them protect their privacy and ultimately keep you from marketing to them at all. Take steps now to protect your customers -- and your business.