Monday, October 17, 2011

Privacy Policies

Shore Up Your Privacy Policy Before Disaster Strikes
A typical Privacy Policy may state that the website will not use any PII without the user's express permission. The FTC will enforce that obligation if it learns that PII is being used without permission, such as to commercialize it. But if the website's Privacy Policy is silent about protecting PII, then the website may use the PII freely.

Last month, we discussed, from the website owner's point of view, the critical importance of using Terms of Service (ToS) and Click Agreements suited to their business.

Now we will address the need for appropriate consideration of your website's Privacy Policy.

What Type of Information Do Privacy Policies Protect?

Personally Identifiable Information (PII) may include many details such as name, address, email address, phone numbers, social security numbers, credit card numbers and the like. From a technology standpoint, every visitor to every website provides some PII about who they are and where they came from. When a visitor lands on a website, this is what the website owner can access:
• the visitor's unique IP (Internet Protocol) address;
• PII about the last website the visitor accessed; and
• information from cookies it left on the visitor's hard drive from a previous visit to the site, perhaps including credit card information and passwords (usually encrypted).

In addition, website visitors provide PII voluntarily when they register as users on sites such as Facebook and LinkedIn or for services like Gmail. Also, visitors provide credit or debit card information to facilitate website purchases. The critical issue about this volume of information presented to the website from the visitor is how that information is protected and what privacy the visitor is afforded.

Website Privacy Regulation
In the U.S., the Federal Trade Commission (FTC) regulates Internet privacy. Currently, the FTC does not require that websites have a Privacy Policy. However, if a website does have a Privacy Policy, it must adhere to its own terms.

A typical Privacy Policy may state that the website will not use any PII without the user's express permission. The FTC will enforce that obligation if it learns that PII is being used without permission, such as to commercialize it. But if the website's Privacy Policy is silent about protecting PII, then the website may use the PII freely.

Outside the U.S., privacy rules are very different. In the EU, Canada and Japan, for instance, there are very specific laws to restrict the use of PII on any computer, whether connected to the Internet or not.

In Canada, the Personal Information Protection and Electronic Documents Act specifies the "...ground rules for how private sector organizations may collect, use or disclose personal information in the course of commercial activities. The law gives individuals the right to access and request correction of the personal information these organizations may have collected about them."

In Japan the Personal Information Protection Act was enacted after conducting public surveys regarding privacy protection for individuals.
The EU 1995 Data Directive (which started in 1989, in the pre-Internet era) regulates privacy for citizens and businesses that operate in the EU.
The U.S. Department of Commerce established Safe Harbor rules that allow U.S. businesses to operate in compliance with the EU laws, so if your website allows users to conduct business with it in the EU, it makes sense to be in compliance under the Safe Harbor rules.

TRUSTe (discussed in greater detail below) offers a specific service called EU Safe Harbor, which includes the following:
TRUSTe can help you certify your compliance with the EU Directive on Data Protection. The Directive prohibits the transfer of European citizens' personal data to non-European Union nations that do not meet the EU's "adequacy" standard for privacy protection.

Of course other companies offer similar EU services.

What Should Your Privacy Policy Contain?

Like ToS and Click Agreements, my informal surveys show that few individuals, at least in the U.S., take the time to review Privacy Policies. But that doesn't mean you should not have one. You have to consider your visitors' expectations, business issues and laws in countries where you operate.

One approach to create your company's Privacy Policy is to find a website you think has similar issues to your own, and use that as a base for your company's policy (but you should be careful to not violate copyright laws when doing so). This might work, but if you guess wrong about what the Privacy Policy should be, your business may be a risk.

Aggregate Data
Many Privacy Policies say that they will not use visitor PII, but the website may aggregate visitor information for resale. Such information may include the percentage of visitors to the website who came from Google (Nasdaq: GOOG) or The New York Times (NYSE: NYT). The largest company in the data aggregation business is DoubleClick, which was purchased by Google a few years ago.

Most website visitors do not feel that their privacy is violated by such aggregation since PII that is specifically identifiable is not being shared, but even where the law doesn't require disclosure, you should consider -- based on business reasons -- whether your Privacy Policy should let website visitors know whether your website aggregates such information.

Consider Subscribing to Privacy Standards
A number organizations promulgate Privacy Standards. Website owners may subscribe, pay a fee, and agree to adhere to the Privacy Standards of that organization. You often see the logos for these Privacy Standards on the front page of websites and embedded in Privacy Policies.

You may be familiar with the TRUSTe logo. Since 1997, that company has offered a variety of online privacy services. This is what TRUSTe has to say about its services:

The company offers a broad suite of privacy services to help businesses build trust and increase engagement across all of their online channels including websites, mobile applications, advertising, cloud services, business analytics and email marketing... Based upon the comprehensive privacy model of "Truth in Privacy," which is laid on a foundation of transparency, choice and accountability regarding the collection and use of personal information, TRUSTe's privacy seal is recognized and trusted by millions of consumers as a sign of responsible privacy practices.

TRUSTe claims that more than 4,000 websites subscribe, including " companies like Apple (Nasdaq: AAPL), AT&T (NYSE: T), Disney (NYSE: DIS), eBay (Nasdaq: EBAY), Facebook, HP (NYSE: HPQ), Microsoft (Nasdaq: MSFT), Nationwide and Yelp." Among many services, TRUSTe offers website solutions for website privacy, EU Sage Harbor, Children's Privacy, Email Privacy, and downloads.

Of course there are other Privacy Standards like those of the Better Business Bureau, which claims that more than 142,000 websites use its Privacy Standards, and also the Online Privacy Alliance and the CPA WebTrust Program.

In Conclusion
Website owners should make sure their Privacy Policies satisfy applicable legal requirements and also address business concerns, so as to give the website visitors comfort that PII will not be used wrongfully.
Therefore, it is critical that each business review how it manages PII, and consider what it tells visitors to the website.
Question: Is a policy important to your website? Discuss what you will do & incorporate.

Wednesday, October 12, 2011

Business Intelligence

The SMB's BI Software Shopping Challenge
Business intelligence is an umbrella term that refers to a variety of software applications used to analyze an organization's raw data. Companies use BI to improve decision-making and identify new business opportunities. However, due to their high-growth and lean organizational structures, SMBs require a different approach to BI. It's important for these companies to approach their purchasing decision with a few critical questions in mind.
Even with a wide range of business intelligence (BI) solutions on the market, many don't fit the unique needs of small and medium-sized businesses. SMBs have tighter budgets, fewer technical resources and less time to spend on deploying and optimizing a business intelligence solution. For some SMBs, just getting started with a BI systems evaluation can be a challenge.

What follows are five criteria to keep in mind while evaluating BI options for your SMB -- but first, a BI primer.

What Is Business Intelligence and Why Would You Need It?
Business intelligence is an umbrella term that refers to a variety of software applications used to analyze an organization's raw data. These applications include data analysis, enterprise and operational reports, dashboards and data mining analytics.

Companies use BI to improve decision-making and identify new business opportunities. Why do SMBs need business intelligence? For the same reason large companies do: to learn more about their business performance and to better execute on their strategy.

However, due to their high-growth and lean organizational structures, SMBs require a different approach to BI. It's important for these companies to approach their purchasing decision with a few critical questions in mind.

5 BI Solution Criteria for SMBs to Evaluate
1. Software Costs: Price is often a key factor in software solution evaluations for SMBs, and some simply can't afford the high initial prices associated with many BI solutions on the market today.

When it comes to software license costs, there are typically two sets of charges to consider: up front perpetual license costs and ongoing support and maintenance costs. While most BI vendors charge for both, commercial open source can be licensed at a fraction of this cost, and Software as a Service (SaaS) BI companies offer subscription-based pricing, which does not require hefty up-front license costs.

In addition, the pricing metric varies among the different BI vendors. Depending on the vendor, you will typically see one of the following pricing models:
o User-based pricing
o Server-based pricing
o A combination of server- and user-based pricing
Under a user-based pricing model, companies are faced with additional charges every time they add new users to the BI user base. Since the success of a BI initiative is strongly dependent upon widespread adoption and use of dashboards, reports and analysis views, granting access to as many employees as possible can be critical. BI tools that utilize a user-based pricing model can inhibit the success of implementation and adoption. Hence, selecting the right tool with the right price metric is essential.
A server-based licensing model can be a better fit for BI, as it enables companies to grant access to more employees in a much more cost-effective manner. Using server-based pricing, companies are free to distribute BI to as many users as their servers can support, without incurring additional fees.

Your Buying Checklist:
4. Is there an up-front perpetual license cost?
5. How much are the annual maintenance and support costs? Does the maintenance cost go up from the second year onwards?
6. What is the pricing metric: server- or user-based?
Length of the ROI Cycle: SMBs typically need proof of investment quickly, oftentimes within a few weeks. Unfortunately, "plug-and-play" in BI is a myth. Any BI solution you choose will require some level of preparation before the data becomes actionable for business intelligence. This is just as true of on-demand solutions as it is of legacy solutions.
However, there's a wide spectrum of time-to-value tradeoffs in BI. Some solutions require building from scratch, while others offer components that you can leverage for a faster time-to-value.

For instance, although SaaS BI solutions claim instant productivity by providing necessary resources to host and manage the application internally, from a data perspective, this option is equally or more resource-intensive than traditional BI. Prior to the initial upload, the data must be pre-processed and cleansed. This process requires significant in-house work by someone who is familiar with the data.

Similarly, legacy BI solutions that are provided by mega vendors are built around complex data models and data warehousing practices that take months, even years to fully develop.

To properly evaluate the length of the ROI cycle for a BI solution, it's especially important to consider time-to-value and the technical expertise that is required.

Ability to Adjust to Business Changes Rapidly: BI projects are not one-time, one-off projects. As business dynamics change and new requirements emerge (which is especially true of SMBs), business users need the ability to add new key performance indicators (KPIs) and data sources, or to easily change the dimensions by which they measure their metrics.

o Growing sources of data: As BI requirements change -- because of mergers and acquisitions, for example -- so too do the underlying data sources. A business intelligence solution needs to remain open and agnostic to different sources of data in order to quickly adapt to change.
o Changes in data or metrics: Once data has been uploaded and built into analytics, reports or dashboards, it will not remain static. BI solutions that don't have an integrated ETL and BI development environment require a cumbersome and time-consuming change management process to incorporate data changes.

Your Buying Checklist:
2. Can you connect to existing data sources, or does the solution lock you into a specific databases or data warehouses?
3. How rapidly can you add a new data source?
4. How easily can you add new metrics and calculations?
Plan for User Growth: The success of a BI implementation is strongly dependent upon its widespread access and use. Historically, a small, technical group within a company performed all corporate reporting and data analysis. Today, this is less often the case. Successful BI environments expand to more and more people in the organization. To plan for more widespread adoption, one should consider:

o Incremental license costs: A per-user pricing and licensing model can inhibit user growth from a financial perspective. Unfortunately, the majority of BI solutions are licensed per user, with fees as high as US$1,000 to $2,000 per user. Because this is cost-prohibitive to many organizations, access to BI is often granted to only a small number of employees. The rest rely on canned reports that IT produces, which in turn creates an IT bottleneck and consequently forces users to make decisions irrespective of the data.

o Ease of use for end users: It can be strategic to have a BI implementation that's adopted by as many business decision makers as possible. Business people typically come from non-technical backgrounds, so having a BI solution that is easy to understand without excessive IT involvement can be crucial, especially at the SMB level.

Your Buying Checklist
2. Who needs access to BI? Do you need to expand the access in the future?
3. Do you have to pay extra for every additional BI user?
4. How much training is required for the end users to become self-sufficient?
5. How rapidly can the users adopt the solution once built?

Ease of Integration With Other Applications: When assessing your BI options, it is important to ensure that the vendor you choose provides the means for enhancing and extending the solution. Proprietary tools will require a lot of money and highly specialized consultants to build product integrations.

Having extensible APIs and a plug-in architecture ensures that your BI solution can be easily integrated with other software products to meet both current and future needs. For instance, BI that is built to report and analyze CRM data can be embedded into that application to provide a seamless user experience. An open and standards-based plug-in architecture ensures that this integration is easily done.

Your Buying Checklist
1.Do you need to integrate your business intelligence with other business applications?
2.What APIs does your BI solution provide out of the box?

In Summary

SMBs have a wide variety of BI options to choose from. A closer look at the different BI solutions available in the marketplace shows the benefits and drawbacks of each.

The right model depends on your organization's needs, skill levels and decision-making processes.
Exercise: Research one type of BI option for your business and discuss why it would be best for your business!

Friday, September 30, 2011

SCRM - Profits!!!

SCRM Bottom-Line Potential: Profits at Many Points
How does SCRM contribute to the bottom-line nature of CRM? It does so in a less direct way than CRM. Hillel, for example, is not a seller of goods or services, but it depends on donations, and its donors love the fact that the organization can now present them with quantifiable, granular data on the engagement of students with Hillel -- data pulled from SCRM.

CRM is a business tool. Like any business tool, its objective is tied to money -- either making more of it through increased sales, or saving it through greater efficiency.

Perhaps because CRM is rooted in sales force automation and hard sales, the customer's path through CRM has mirrored the customer's path through the sales funnel. The objective is to get the customer to the end of the funnel and conversion -- and then to start applying marketing and service muscle to make sure that customer stays in the fold.

When you see visual representations of this, they're very linear. They're either a funnel or a pipeline, mirroring the visual metaphors of sales, or they're circular in design, borrowing from marketing's visual lexicon.

Social CRM (SCRM) can and often does fit into these representations and helps businesses cross the "finish lines" they contain. However, part of the confusion around SCRM stems from the fact that it allows its users to apply customer data in many places along the path to sales, service and retention, often in nontraditional ways, to help reach the ultimate goal of increased revenue.

The value of SCRM can insinuate itself into the way the seller works in multiple segments of the sales path, and it can do so while offering new and useful benefits to both the customer and the seller.

Real-World Examples
For example, a major insurance house uses SCRM tools as part of its processes to prepare inside sales staff for calls. The old, linear process would have been to acquire a lead, distribute it to an agent, call, then use the data provided by the customer to prepare a quote. Research would have been done on an ad hoc basis.

The new process is acquire-distribute-research-call -- the technology enables sales staff to research their prospective customers and prepare quotes ahead of time, allowing them to make the customer experience better and to save them time so they can get more calls accomplished in a day.
Another great example is Hillel, the Foundation for Jewish Campus Life. It uses a social CRM model to track its relationships with students -- what activities they attend, where they are along their journeys as Jewish students, and so on. Facebook and Twitter are key components of the program -- as is the fact that it's speaking to young people through a communications medium they understand.

Back to the Bottom Line
So, how does this relate to the bottom-line nature of CRM? In true SCRM fashion, it does so in a less direct way than CRM. Hillel's not a seller of goods or services, but it depends on donations, and its donors love the fact that the organization can now present them with quantifiable, granular data on the engagement of students with Hillel -- data pulled from SCRM.
In other words, it can connect donor dollars to the effectiveness of the program in a way that it never has been able to in the past -- thus helping to keep the dollars coming to sustain the program. Meanwhile, students are better served as well. By the end of the 2011 academic year Hillel was tracking more than 88,000 students -- and the organization has more effective ways of alerting them about events and opportunities.

In the Hillel example, SCRM provides a means to add to the bottom line right now -- but it also builds a better relationship for the organization with students, who will grow into donors with time.

The real bottom line is always about dollars. That's a given. But how SCRM contributes to the bottom line must now be understood as something that's up to each organization to define and to measure accordingly, and those contributions should come in multiple parts of the customer lifecycle. It's not whether SCRM rings the cash register -- it's how it does so.

Research & Comment;
Do you agree with this type use of data and information? Why or why not? SCRM is the focus of many companies. Provide an example with some factual information to back –up their use of the CRM process?

Monday, September 19, 2011

Mobile Payments

MasterCard gives sneak peek into mobile payments future
The availability of Google Wallet will be announced within weeks
MasterCard on Thursday gave a sneak peek into the near future of mobile payment systems and said that the Google Wallet application is within weeks of being rolled out commercially.

Google Wallet, announced in May, lets mobile phone users pay for purchases in stores by tapping their phones against point-of-sale terminals. At the tail end of a media and analyst day in New York, MasterCard demonstrated the application as well as other, future mobile payments systems.

Initially, Google Wallet will work only on Nexus S phones, made by Samsung, on the Sprint network. Nexus S phones now on the market incorporate Near Field Communication (NFC) technology on an embedded chip, which allows for payment information to be transmitted via the tapping technique.

Google Wallet will work on PayPass terminals already deployed in stores, though some of the terminals will need an upgrade to work with the applications, according to officials at the demonstration. In the U.S., there are about 150,000 retail locations equipped with PayPass terminals, according to Kathleen Reilly, vice president and senior business leader at MasterCard, who said the Google Wallet application will be rolled out "within weeks."

Up to now, the PayPass terminals have worked with NFC chips embedded in cards or special stickers placed on the outside of mobile devices. However, chips embedded in mobile phones offer big advantages, according to Mario Shiliaski, senior vice president of Innovative Platforms.

"A big advantage is that the chips are embedded in secure elements in the hardware, and if they are compromised they are designed to self-destruct," Shiliaski said.

In addition, there will be a range of complementary applications for the technology that users will be able to download, Shiliaski noted. Google Wallets will initially offer the ability to store electronic coupons that can be redeemed at retail outlets, he said. Later this year, MasterCard's inControl will be available for download, he added. InControl is designed to let parents or employers establish parameters for when, where and how their cards are used. Users will get text messages, for example, when certain limits are met.

Major retailers including Macy's, Walgreens, Subway, Noah's Bagels, American Eagle, Bloomingdale's, Peet's Coffee and Toys 'R' Us have signed up to work with Google Wallet.

MasterCard also opened the kimono on a number of projects cooked up by the MasterCard Labs, established after the financial services giant acquired Dublin-based OrbisComm in 2009.

The projects demonstrated Thursday focused on the company's QkR platform, technology that embraces motion and audio signals as well as touch to allow for a range of applications. One application demonstrated Thursday allowed a phone user to scan a rebate coupon and share it via Facebook or Twitter
"This allows for a different type of viral marketing, where people using this technology and sharing information with friends can get additional rebates," said Garry Lyons, chief innovation officer at MasterCard.
The social-network sharing technology is working now in a pilot with more than a hundred users, Lyons said. A more futuristic application involves audio signal technology. In one demonstration, audio signals embedded in a TV commercial were detected by a mobile phone application that a person could then use to download coupons related to the advertisement.
QkR technology goes beyond mobile phones, however. Lyons showed off one application where users could input payment information via the Xbox Kinect, using gesture recognition to select items and go through a checkout process.

Though some of the applications demonstrated by MasterCard are not likely to be rolled out any time soon, the company is looking to officially announce details related to the technology soon, possibly over the next few weeks, officials said.

The QkR platform, with its range of input capabilities, is a good hedge to the NFC-oriented Google Wallet application. NFC will have plenty of competition, including a PayPal mobile payment initiative announced Thursday that works by having mobile devices scan product bar codes and authorize payments through PayPal mobile accounts.
What are your thoughts in respect to this technology? How will society adapt to this innovation? Discuss some pros and cons on this type of new technology? Ie. Security, acceptabilty, adaptability, etc.

Monday, September 12, 2011

E-Business & Shipping

Shipping Shock: Why Ready-to-Buy Customers Bail
Although consumers are certainly enticed by the prospect of free delivery, they are also savvy about purchase prices. If the price of the product incorporates the shipping costs and inflates the price above the same or similar products elsewhere, the consumer will likely be put off at an early stage. With price comparison websites, it is even easier for the discerning buyer to ignore a marked up product.
More than 50 percent of e-commerce shoppers cited shipping as a reason for abandoning their shopping carts online, according to research conducted by Royal Mail, the UK equivalent of the U.S. Postal Service.

Furthermore, 43 percent of consumers' retailer choices were influenced by their delivery experiences and options, the Interactive Media in Retail Group found.
When you consider how much it costs to acquire a new customer on an e-commerce site, it becomes apparent that attempting to make a small extra profit by adding some extra margin on top of delivery costs or not supplying all of the possible delivery options at checkout can be futile.

Mistakes like these mean that e-tailers are not just missing out on the delivery margin, but rather on the entire basket's value and, worse still, the entire potential LTV (life time value) of the consumer. It is therefore important that e-commerce firms take into account the psychology of the consumer when it comes to shipping.

The key factors that influence the buying decision when it comes to delivery options online are price of delivery, speed of delivery, delivery options and carrier choice. The transparency and clarity of these key factors early on in the e-commerce transaction are also major contributing factors.

Free Delivery
Free delivery is becoming a cornerstone for a growing number of e-commerce websites. Free delivery can easily be used as a promotional tool for online companies -- one that not only draws in new customers but also encourages repeat usage from established customers.

This could not be more clear than it is on, which has ingrained free delivery not just as a nicety but as part of its business model. This is proved by its tag line across the site, "FREE DELIVERY ON EVERYTHING." Its delivery policy is outlined immediately for any potential customer and highlights its USP.
Although consumers are certainly enticed by the prospect of free delivery, they are also savvy about purchase prices. If the price of the product incorporates the shipping costs and inflates the price above the same or similar products elsewhere, the consumer will likely be put off at an early stage. With price comparison websites, it is even easier for the discerning buyer to ignore a marked up product.
Free shipping on low-value items can increase revenue while simultaneously eating away at company profits. It is for the company to decide whether factoring in free shipping into the overall budget will ultimately yield a positive return on investment.

Importance of Transparency
Commonly the registration/login page is the point in the user journey where many e-commerce transactions fail if the terms around delivery have not yet been clearly stated. Vistaprint, for example, is a very large and successful company, but it relies on a risky strategy when it comes to shipping costs -- hold them back until the very last moment.

Once the customer gets to checkout, delivery prices are finally displayed, ranging from Pounds 18 to Pounds 3.08 (if a customer is prepared to wait 21 days). While some consumers will be indifferent to shipping costs, the unannounced nature of last-minute additional fees will often scare off others. Therefore, in the case of Vistaprint, the chance of re-use and customer retention is likely to be low due to the lack of transparency throughout the whole process. While this will certainly affect the dropout rate, it is a strategy that has successfully worked for the company for many years.

On the other hand, Amazon (Nasdaq: AMZN) maintains highly transparent shipping costs, whether charged by itself or by sellers who operate on the site. On product pages, alongside the product price, it clearly displays the various delivery options. Product pages on also carry great transparency and clarity in regard to delivery -- not only mentioning that it is free, but also providing an approximate time frame. Play's take on delivery essentially removes any chance for discrepancies or confusion on the part of the user.

Many e-commerce sites that offer free shipping will state certain provisos, such as a minimum spend of US$25 or shipping to an American address. It is in Amazon's best interest to clearly outline these requirements to any potential consumers before they reach the checkout stage.

One of the most interesting delivery promotions run by Amazon is Amazon Prime, which is experiencing huge success. For a yearly fee of around $79, consumers enjoy an "all you can eat" shipping service of free two-day deliveries on all items purchased.

During the 2008 holiday season, Amazon Prime enrollment was as high as 4.8 percent of purchasers, according to This tells us that consumers clearly value speedy, reliable and up-front delivery options.

From an e-tailer's point of view, the lock-in effect of having a consumer pay a subscription for preferred delivery options is substantial. A returning customer, in this case, is worth more than the revenue from an increased shipping cost. Although consumers can be discouraged by shipping costs, the psychological effect of displaying them at every stage of the buying process enforces an e-tailer's trustworthiness.

Context of Shipping Costs
The effect shipping costs will have on a potential consumer is undoubtedly dependant on the item(s) that need to be moved. For example, a customer may be outraged by the thought of paying Pounds 6 shipping for a DVD -- but would be ecstatic if the same cost were applied to a newly bought washing machine.

Within this paradigm, the majority of e-commerce sites do not have universally static shipping costs across varying products but rather base them on item prices or dimensions. Similarly, there are scenarios in which the consumer is willing or even expecting to pay a seemingly higher shipping cost. A consumer who is buying a fragile item, is shipping internationally or has a niche shipping requirement such as a chilled delivery vehicle, will expect a costlier delivery charge.
Consumers have also come to expect a slower shipping service if delivery is free of charge. Conversely, the quality and speed of shipping should be reflected if the consumer pays a premium for delivery.

Comment: What are your experiences of shipping upon ordering online? How much are you willing to pay to get a product shipped to Canada? Is speed of delivery important? Is free delivery ‘free’? Explain. What other options are available in respect to shipping products?