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Customer Resource Management

Repeat business is the ultimate goal for any online company, but ensuring that your customers remain happy after they log off your website is an art that is not easily mastered. In order to keep their customers coming back, many online businesses develop a customer resource management, or "CRM," plan. Although some CRM plans have been criticized for violating the privacy of online customers, if done correctly, your CRM can respect the privacy of your customers and simultaneously give your e-business a wealth of information.

CRM is a strategy that combines technology and business to enable your company to collect and analyze the abundance of customer information that your company receives on a daily basis. In doing so, your company can better understand its customers' current and future needs.

Let's say, for example, your company sells office supplies online. Since your sales are completed electronically, you never see your customers. That doesn't mean, however, that you don't know a whole lot about them. When your customers visit your website, they may browse from page to page looking for items of interest. We'll call this the first "contact point." Some of your customers may complete an online order form (a second contact point), while others may favor calling your company's toll-free number to complete their purchases-a third contact point. On the few occasions when customers return items, they may provide you with an explanatory email or telephone call to clarify the reason for the return.

Yes, that's a fourth contact point.

At first glance, you may think that these contact points are separate and distinct, but they're not. In fact, when it comes to collecting information about your customers, they're virtually identical. Regardless of whether information is received in person, over the Web, or over the telephone, each contact point provides unique information about your customer's shopping needs and preferences, while it simultaneously promotes your company's products.

A good CRM strategy can help collect, collate, and analyze the information collected from your company's contact points. Using information collected from in-store sales, Web-based transactions, returned merchandise, and customer satisfaction surveys, your company can determine and adjust to market trends, customer needs, and levels of customer satisfaction. This leads to happier customers who, in turn, produce repeat business. Ahh, say it with me, "repeat business."

However, privacy groups have correctly pointed out that CRM strategies can also be used to violate the privacy rights of a company's clientele.

After all, it's okay to collect the information from your company's various contact points for making your online business a leaner, more profitable enterprise. On the other hand, if part of your CRM strategy is to sell that customer information to other parties, you may be running afoul of the law.

Some statutes, like the Gramm Leach Bliley Act, prohibit you from using certain customer information without first notifying your customers of your intentions. In order to keep your CRM plan from becoming a slow-moving target for privacy watchdogs and litigious attorneys, when creating your company's CRM, you should keep the following areas in mind.

First, think about your company's contact points, and consider what type of information you want to get from each customer interaction. Once you have an idea of the type of information you want, think about the ways in which you can get this information without impinging your customer's privacy. One strategy is to offer people a reward for their information.

For example, a customer might not want to reveal whether he has purchased items from your competitors in the past six months, however, he may quickly divulge such information to receive $5 through a mail-in rebate.

Second, consider how you can inform your customers of the fact that you collect their information, without scaring them off. I've found that the best way to do this is with an unambiguous privacy policy. Remember, your customers aren't necessarily unwilling to give up some of their information; they simply want to know what's going to happen to it after it leaves their possession. If you're only using their information for focusing the marketing efforts of your online business, tell your customers that.

Of course, if you describe your CRM's uses in your privacy policy, you better do so accurately. If your company fails to follow its privacy policy, it may receive a letter from the local Attorney General or, perhaps, the Federal Trade Commission, asking for a "meeting" to "discuss" the violations. The overall message here is that your CRM strategy should be used to discover and analyze your online company's strengths and weaknesses, to help your company better spend its valuable resources, and secure repeat customers. Once you start using the information gleaned from your CRM to impinge the privacy of others, you're treading on thin ice. My advice: Invest in a strong CRM strategy, and use it for good and not evil. No one can ever fault you for doing that.

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