How Building Trust Can Boost Online Sales

As the economy sputters, small business owners remain intently focused on the bottom line. So a conversation about adhering to Web site privacy best practices might seem a bit--well, off topic. However, if your business sells anything online, few things are more important than your online reputation.

Consumers are increasingly interested in doing business with companies they know and trust while avoiding the criminal elements that stalk the Internet. In fact, 60% of online shoppers abandon their carts at some point during their shopping experience, mostly due to fear of identity theft (Sherpa Marketing Study, 2006), and almost half (44%) say they're less likely than they were just a year ago to trust a Web merchant with personal data (Yankee Group Study, 2008). As the climate of trust erodes, consumers are more sensitive than ever.

Unfortunately, many small businesses are not taking consumer privacy as seriously as they should. A recent survey by my company showed that 56% of small business owners with Web sites don't have privacy policies, and the remainder that do have policies admitted to cutting and pasting them from somewhere else.

As competition for online customers heats up, it's vital for small businesses -- especially those with less recognizable Web sites - to pay strict attention to their privacy policies to ensure they are building confidence and trust among their customers. Neglecting to do so will erode consumer confidence and ultimately be detrimental to sales.

Once the economy improves, ecommerce will become an increasingly important channel for entrepreneurs -- about a third of SMBs in the U.S. currently sell products online or use e-commerce as a business tool, with another 26% planning to follow suit this year (Yankee Group Study, 2008). Yet with limited marketing budgets and minimal resources for legal compliance and IT support, what's a small business owner to do?

• Display a "trustmark" or third party "seal of approval." Cybercriminals are increasingly active online, and consumers are wary about sites they don't know -- especially when it comes to handing over credit card and personal information. Consumer Reports indicates that 71% of consumers look for privacy seals before doing online business on a merchant's Web site. A privacy seal indicates a Web site is in compliance with best practices to protect consumers' online privacy and personal information will be kept safe, In the case of TRUSTe, if there are any disputes with a Web site over a consumer's privacy, we will help solve them.

• Get a good privacy policy. Who has time for legalese? No one. However, although consumers may not read privacy policies carefully, they certainly look to see if they exist. And others are starting to follow suit. For example, Google's Adsense is now requiring updated privacy policies for all publishers on their network, and legislation is going through congress that may require more ample privacy regulations for businesses going forward. Be sure your privacy policy is up to date, accurate and easy to read. And make sure it's yours and not someone else's.

• Carefully navigate targeting methodologies. Targeting based on past purchase or demographic profiling are popular practices for retailers as it delivers appropriate offers that match consumers' tastes and buying preferences. While targeting can boost sales, it also has to be done right. Make sure the data you are collecting on consumer behavior is in compliance with existing privacy laws, as consumers can be unforgiving and highly vocal when companies misstep. What may seem like an annoying complaint on an obscure blog could spiral into a full-blown public relations nightmare overnight.

• Don't be insecure. A business that doesn't ensure site security is like a business without a lock on the door. In addition to privacy, be sure that your Web site has ample security.

People want to buy from the companies they know and trust. In the highly competitive realm of online commerce, where the difference between winning and losing a sale happens in a matter of seconds, implementing privacy best practices can help smart businesses differentiate themselves and win consumer trust, loyalty and increased sales.

Maier, a recognized authority on Internet trust and privacy, is the CEO of TRUSTe, a provider of privacy seals for Internet businesses.

This story, "How Building Trust Can Boost Online Sales" was originally published by Network World.

Copyright © 2009 IDG Communications, Inc.

 
Shop Tech Products at Amazon