- The types of personal information you collect
- Why you collect certain information
- How you use and disclose that information
- How you protect and store that information
- Your customers’ rights when it comes to their personal information
- Your contact information
1. It’s the Law
US Federal Law
The Children’s Online Privacy Protection Rule (COPPA) requires American websites and online services directed at children under 13 or that gather consent from a child’s parent or guardian before collecting, using, or disclosing personal information from kids.
Another law, the Health Insurance Portability and Accountability Act (HIPAA), enforces specific requirements for how companies in the healthcare industry can collect, use, and store sensitive patient data.
If you’re doing business in the European Union, you need to be compliant with the General Data Protection Regulation (GDPR). This law follows a “Privacy By Design” process, which entails businesses examining their data collection and storage processes and making sure they’re designed with privacy in mind from the start. That way, you’re less likely to run into privacy issues down the road.
The GDPR also requires businesses to make it clear to customers what personal information is being collected and why. On top of that, businesses must take down any personal data upon a customer’s request and let them know if their data has been breached.
2. It Builds Trust With Your Customers
In today’s day and age, data privacy is a very real concern for consumers. However, according to Salesforce, 88% of people trust companies that vow not to share their personal information without permission.
3. It Can Make Your Customers Feel Comfortable Doing Business With You
How many times have we all read about a major data breach in the news and cringed at the thought of our personal information being leaked? We’ve all been there. And you don’t want your customers to feel that way when they’re doing business with you.
4. Some Third-Party Platforms Require It
5. It Can Help You Avoid Fines and Penalties
- The GDPR provides a maximum penalty of €10 million or 2% of worldwide annual revenue from the prior financial year – whichever is greater.
- The maximum fines for CCPA violations are up to $7,500 per intentional offense and up to $2,500 per unintentional offense.
- HIPAA classifies violations into five levels. Tier 1 penalties may be as little as $100 per violation up to $50,000, while the most serious violations, Tier 4, incur a minimum penalty of $50,000 per occurrence and no maximum cap.
- Each violation of the Children’s Online Privacy Protection Act (COPPA) can result in a $43,792 penalty.
6. Search Engines Will Take You More Seriously
7. It Enables You to Stay In the Loop With Technology
The world of data privacy is constantly changing, which means that you need to stay up-to-date with the latest regulations if you want to avoid any penalties.
8. It’s the Ethical Thing to Do
Imagine if your personal information was mishandled — you’d be pretty upset, right? Well, your customers feel exactly the same way.
They have a right to know how their information is being used, and you have a responsibility to tell them. There are no two ways about it.
The Bottom Line: Be Transparent
Just like you have the chance to leverage data to improve your business, your customers should equally have the chance to know how their data is being used. After all, it’s their data. They’re only asking for one thing: transparency.