Ethical and Privacy Issues of CRM

It is a necessity and a strategy to know and understand your customers and your potential customers, and to do that company takes a step closer to their customers through customer relationship management (CRM). CRM is benefitting both sides, company/supplier. Even customers are sharing willingly their personal details about themselves to a certain company. Company like banks and insurance agents definitely need these personal data about their customers for their own marketing strategy and maintain the relationship between them and their clients. CRM helps company/supplier reduces their cost, since they can offer only products that are wanted, when they are wanted, and he passes the cost savings on to the customer who signed up for the company’s CRM. But sometimes some things just cross the boundary, have you ever looked for something whether you really needed it or you were just browsing and suddenly on every social media you have on your phone shows you an advertisement of the product? Well that’s probably what CRM does, because the system may categorize customers in a way the customers take offense to. Not just that, sometimes they just know too much about you, like where you work or the college you go to, even to your medical condition.

There are many people (customers) feel that they’re being pried because of this. But looking back to what they agreed when they signed up to something, it’s not really on the company’s fault, although it is concerning our privacy, it was us who agreed. To do and implement such system, a company has to go through some steps, the more detailed and extensive data about their customers they can collect and store, the better. Not just detailed and extensive, they also have to be accurate and with the customers’ consent, because sometimes they will collect and store personal and sensitive data from their customers, such as credit card numbers, address, and medical histories. To be able to collect and store those type of data, the company have to ensure the safety of the data first, then they have to ask the customer’s permission to store the data (like terms & conditions, etc.) and assure them the safety of their personal and sensitive data. During data collection, it is also very critical to verify the identity of the customer and the accuracy of the information being submitted before storing them in the database later on. High security for these functions is costly but ethically necessary.

Despite being a strategy to get to know and understand your customer wants and needs, CRM it is not viewed positively by those who feel that it invades their privacy and facilitates coercive sales practices. And as a customer myself, I usually would their terms and conditions before agreeing to it, since we all know that they will collect and store our data. Being a customer also needs extra time and efforts to keep our privacy safe to ourselves, we cannot always feel too comfortable on using something and trust or rely on a company’s services too easily.

References:

Rainer, R. K., Prince, B., Cegielski, Casey G. (2013). Introduction to Information Systems (Supporting and Transforming Business). Wiley. Fifth Edition. ISBN: 978-1-118-67436-9.