These days, collecting data associated with your visitors and customers on your website has become a standard marketing practice. Using this data, you can improve the customer experience, refine your marketing strategy and, in some cases, earn extra revenue.
The truth is, many customers worry about data collection and misuse. According to Pew Research, nearly 80% of Americans are concerned about how companies use the data collected through websites.
Better yet, by telling users how you secure that information—especially if you process online payments—you give them the confidence to buy your products online without fear that their information will fall into the wrong hands.
What data you’ll collect and how you’ll use it
Methods of collection
Redress and security information
01. What data you collect and how you’ll use it
You should list the exact types of data that you collect from users, such as IP addresses and email addresses. This may include a person’s name, age, address, interests, credit card information, banking information and more. Be as specific as possible to avoid any misunderstandings.
In addition to telling people what you collect, you should also tell them why you collect it. Whether you’re using information to recommend new products or tailor promotions to your target audience, be transparent to help put customers at ease. A statement such as “We may use your information to provide you with special offers” goes a long way.
02. Methods of collection
03. Customer communication
One of the principal reasons that websites collect data is to communicate with customers. If you’re collecting contact information, a communications clause is necessary.
If, for any reason, users don’t want to have their information collected, they should have the choice to opt-out. The communication clause should therefore explain that visitors may opt out of having their information collected at any time. Tell them exactly how to do it by referring them to a link or providing an email address to reach out to. You can, however, mention that when they choose to opt out, it may affect their site experience. For example, products or deals relative to their location or demographic may not be disclosed.
04. Redress and security information
In addition, you should provide information about a customers’ rights related to their personal information. In accordance with privacy regulations around the world, site visitors may have - among other rights - the right to access their data or ‘be forgotten’ (be permanently deleted from your databases). You should provide your users with a list of their rights and the ways on how to exercise them.
You can also let customers know they can report a privacy violation to the U.S. government.
05. Child privacy
Due to the Children's Online Privacy Protection Act (COPPA) in the United States, you need a clause that addresses child privacy. This law states that it is illegal for your site to collect private information from minors without using a specific protocol to do so.
Even if your business caters to adults, it’s still necessary to add a brief clause to indemnify you in the event of any accidental violation of COPPA.
For instance, Hormel Foods uses this simple passage:
“Our Website is not intended for children under 13 years of age. We do not knowingly collect personal information from children under 13. If you are under 13, please do not provide any information on this Website.”
06. Future changes
07. Contact information
Privacy as a good business practice
By Eric Goldschein
Fundera Partnerships Editor
Eric Goldschein is the partnerships editor at Fundera, a marketplace for small business financial solutions. He has nearly a decade of experience in digital media and has written for outlets including Business Insider, Startup Nation, BigCommerce, Square, HostGator, and Keap, covering finance, marketing, entrepreneurship, and small business trends.