According to a recent survey CRM Essentials and commissioned by global technology company Zoho, businesses still don’t take data privacy of their customers seriously.
It states that 62% of U.S. and Canadian companies don’t inform customers that they allow tracking code from third-party services on their websites, despite the majority claiming to have well-defined consumer data privacy policies that are being strictly applied.
It reveals how frequently unethical data collection tactics are used to capture information that’s lucrative for paid advertisers, such as a user’s site behavior or location.
The survey found that third-party ad tracking is everywhere — 100% of respondents said their companies allow it, and 57% are “comfortable” or “very comfortable” with the way third-parties use customer data. The findings also show that the more a business relies on surveillance data to drive revenue, the more comfortable they are with the practice.
What is even more shocking is that this business practice is also true in California, the only U.S. state with a consumer data privacy law. Nearly 70% of California companies don’t inform customers that they allow third-party ad trackers on their websites, yet 56% say their company has a well-defined, documented policy to customer data privacy that is strictly applied.
“User tracking to serve ads has turned into adjunct surveillance, a term we use at Zoho when companies collect data without consumer knowledge. This trend started with B2C services, but it’s alarming to see it has carried over to the B2B world, especially given how essential SaaS solutions are for working remotely during the pandemic. If you’re using a free service, you’re paying for it with your data. That includes free B2B software and mobile apps you might be using, and we need companies to be transparent with customers about how they track users,” explained Raju Vegesna, Chief Evangelist at Zoho.
“It’s no secret that data is valuable for powering personalized ads, but we were surprised to find how comfortable companies of all sizes are with unethical data collection methods that leave their customers in the dark and their information in potentially dangerous hands,” said Brent Leary, co-founder and partner of CRM Essentials. “It will be interesting to see how shining a brighter spotlight on third-party ad trackers impacts future business models. As more of our interactions take place digitally, organizations will have to recognize how important safeguarding data is to the overall customer experience. And business leaders will need to weigh the risk of consumer backlash and regulatory compliance issues against the benefits of revenue from surveillance data.”
What small business owners can do is simple if they want to make money off of their customer’s data. Have a data privacy policy and follow it. Tell customers what data you are tracking and get their permission to use it or the ability to opt out. If not, this is a form of stealing.
“Zoho has never sold its customers’ data and never will. We also don’t monetize the behind-the-scenes analytics in any shape or form. That means we leave money on the table, but just because it’s there doesn’t mean you have to take it,” said Vegesna. “We’re proof that you can be successful without profiting off selling consumer data to third-parties.”
