Why Should Websites Be Careful with Tracking Personal Data?

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When the web first emerged as a mainstream channel for businesses in the 90s, one of its fundamental traits was anonymity. People simply used a different username to keep themselves on the down-low. All 90s kids remember their first username, right?

Since then, the web has undergone a massive transformation. Businesses now have too much to gain from collecting a visitor’s data.

When someone opens a website in 2021, the website likely collects a whole bunch of information including the device of the visitor, IP address (and by extension, their location), browser footprints, and a range of other things.

The Cisco Survey

Cisco conducted a survey in 2019 to analyze the actions and attitudes of customers towards data privacy. The survey found that 32% of the respondents, referred to as “privacy actives” in the survey, pay attention to a website’s data collection and sharing policies. They also revealed that they’d consider (and some already have) switched companies over these policies.

This survey provides businesses an opportunity to understand how an average customer’s view towards data privacy is shaping up. Businesses could use this information to amend their data privacy policy to align more with what their customers deem reasonable and retain more customers over time.

Why Websites Should Be Careful About Tracking Personal Data

The Cisco survey clearly establishes one thing – visitors are starting to become wary of websites that collect personal data.

All businesses should take cognizance of what personal data is. For those who already know what personal data is, here are a few reasons why collecting it requires some careful consideration.

Wide Scope of Personal Data

The primary concern with collecting personal data is that the definition of personal data differs across jurisdictions. The definition of personal data is wide enough to warrant the preparation of a thorough personal data guide.

Personal data includes a comprehensive range of information and isn’t limited to just a name and a phone number. Personal data could even include sensitive information such as the website visitor’s bank account number in some cases.

This effectively leaves a website susceptible to a whole host of data-related risks. Websites must therefore remain vigilant about their data collection and processing so they can retain the trust of their customers and visitors.

May Demotivate Customers

Any prospects visiting a website that are careful about websites they visit and privacy in general, may want to read through your privacy policy. Let’s face it though, marketers hate creating this policy page and prospects dread the thought of having to read it.

If there are other websites that offer similar services sans the data collection terms, guess who stands the benefit?

Even if the customers had no other option, a website that has an elaborate privacy policy with a ton of legal jargon may make them a little suspicious. Instead, marketers could use brief disclaimers at various stages to communicate with visitors how the data collection is used to improve their experience.

Of course, this doesn’t warrant skipping legal disclosures altogether, but this gives visitors a more digestible version of the website’s data collection intentions and the visitors are likely to appreciate it.

Customers May Hold You Accountable

The previous section briefly touched on using the collected data to improve customer experience. Websites that make this claim should pay careful attention to how they plan on delivering on their promise to the customers.

Customers certainly appreciate the improved experience, and many don’t mind if websites collect personal data for this purpose. If the website doesn’t actually improve customer experience through data collection though, it could have consequences.

Some customers may explicitly call websites out on the lack of efforts towards experience even after collecting data. On the contrary, companies that do use data to improve customer experience stand to gain significantly. They can retain customers, improve customer satisfaction metrics, and consequently improve their top and bottom-line figures.

Watch Our for Data Privacy Regulations

Marketers need to look out for a range of data privacy regulations such as GDPR (in EU), HIPAA, PCI-DSS, etc.) to understand more about the data that they can collect, store, and use.

The regulations are dependent on the region and jurisdiction the business falls within, so marketers that represent companies working across regions and verticals may find this task even more challenging.

Marketers and the legal team may even need to outsource some of the consultations and appoint some staff to periodically check on changes in regulations and monitor their privacy policy to make sure everything is in order.

Businesses will need to spend considerable time, effort, and resources on ensuring compliance with these regulations, not only to retain their customers’ trust, but also to avoid potentially expensive litigation costs and penalties.

Possibility of A Data Breach

Websites that collect data are, of course, responsible for keeping it safe.

This requires websites to have top-notch security models and zero trust policies in place to avoid any potential data breach, which could cost the company a lot of money as penalties from regulatory bodies.

Often, even if the company isn’t liable for a data breach, the negative publicity that accompanies it will most likely put a big dent in the reputation of the business.

The damage is permanent, and customers are likely to become reluctant about sharing data with the website moving forward. This can manifest in several ways, such as reduced demand and lack of data for strategic planning.

Carefully Tracking Personal Data

The previous section discussed why it’s important for websites to be careful about tracking personal data. What’s also important, then, is to know how to be careful about tracking personal data, because let’s face it – data can provide businesses great insight.

Invest in Employee Training

A business’s IT team should receive training about data privacy laws so they can construct the website without violating any laws. In addition to the IT team, any employee who has access to user data should be made aware of best practices for capturing, storing, and using private data.

This helps steer clear of potential lawsuits, which are likely to cost several times more than what a business would need to spend on training their employees about how to use private data that website visitors leave behind.

Take a Consumer-Centric Approach

To begin with, be transparent about the website’s data policy. When a customer sees an ad for the same product on their Facebook feed after browsing for that product on a website, they can do the math and see how the ad came about. This leaves a poor impression on them. Being more explicit about collecting private data is something most customers appreciate.

Also, don’t make data only about the business. Sure, collecting private data helps websites analyze data and make better decisions, but how does this help customers? There’s certainly some value that data collection provides to consumers as well, so websites must communicate this.

Customers can receive targeted offers based on products that most appeal to them, or they can be notified of products that they’d potentially be excited about when they’re introduced for the first time on a website. Informing them of these facts can go a long way in them getting comfortable with sharing personal data.

Consider a Shift of Power

When a customer visits a website, they almost always see a banner asking permission to store cookies. Similarly, consider seeking their authorization about collecting personal data. While some customers may refuse to share data, not all will.

Customers are especially more likely to authorize data collection if they’re aware of the potential benefits, as was discussed in the previous point. When customers see the benefits they’d receive, and believe it’s worth sharing their data in exchange for benefits, they’re more likely to authorize data collection.

Aiming for Complete Elimination of Risks Is Delusional

When it’s all said and done, the big picture is that websites can’t completely eliminate the risks that come along with collecting personal data. Sure, they can take measures to the best of their ability to mitigate these risks, but complete elimination is generally not possible.

The most common reason for data breaches, though, is human error. All humans are bound to make a mistake sometimes. Even if the staff remains diligent, hackers always come up with new ways to steal data and they’re a lot smarter than most reckon.

Therefore, a website should always keep its guard on. Both facts cause a state of dilemma. Not collecting personal data impacts the bottom line, and collecting it brings along several risks. The key, then, is to find the sweet spot.

Collect personal data, but be vigilant with the website’s security and ensure that all employees understand the consequences of an error. Try to keep data secure and aim to serve the customers in the best way possible.