Does privacy pay?

Wednesday, 18 June 2003, 9:26 AM EST

The flat economy has forced companies across America to require any new investments to deliver hard economic returns within short timeframes. Do privacy-related investments generate these kinds of returns? In many cases, absolutely not. But if your company plays in a privacy-sensitive industry, your customer databases may be empty in a few years if you don't start investing in privacy now.

The reason many privacy investments—in permission-tracking technology, for example—don't generate hard returns by themselves is because they're like investing in buildings. They enable other things to happen in the future that generate the returns. In addition, there are few ways besides Web privacy seals for customers to know which companies are actually investing in and protecting privacy. If customers can't see the results of the investment, privacy won't pay.

So what does it take for privacy investments to finally generate hard returns for a company? Putting my customer hat on, privacy would have to be a key part of what I think about when I see the company's logo. I would give accurate and more complete personal information to companies I could trust. I would need to trust that the company won't share my information with others, will protect it from hackers and won't hound me with unwanted direct marketing. In America, this means going above and beyond the law.

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