Win-Win Approaches to Gathering Customer Information

- December 23rd, 2008 by Steven Leung

In this article

Balancing response rate and lead qualification
Designing web forms for a win-win
How California Law can affect you, even when you aren’t based in California

Previously, I wrote about how people go through four levels in their business relationships with your company and how moving from one level to the next requires an investment of trust on their part.

This investment of trust is especially true when asking visitors to your website for their contact information (which is the second level: converting visitors to prospects). By being customer-friendly in collecting and using your visitors’ information, you will encourage more people to trust your company with that information.

There are high-profile examples not to follow. Silicon Valley intellectual property attorney Allen Lee writes about how Sony was found to have violated the Children’s Online Privacy Protection Act (COPPA). As recently as two weeks ago, Sony learned — through seven-figure civil penalties — that there are legal limitations to how you can collect and use personal information.

The importance of staying within both the moral and legal boundaries of what you can do with customer information is clear, and you can find detailed information at the Online Privacy Alliance and the Consumer Privacy Guide.

From an integrated marketing perspective, collecting customer information is the first step in building relationships with your prospects. As such, your website must:

Clearly communicate how the information is used
Explain the benefits of providing that information
Make supplying that information as easy as possible

These three factors help you establish credibility and increase number of visitors who will give you their information. Here are customer-friendly techniques you can use and traps to avoid.

Balancing Response Rate and Lead Qualification

Would you rather have larger numbers of leads to sort through or fewer, well-qualified leads? This classic question depends on the culture of your business. Not having enough leads means less business. Poorly-qualified leads waste your time.

Response rate vs. qualification is also a matter of approach. Some businesses would rather build a larger database of prospects and attempt to build long-term branding and, eventually, business relationships through drip marketing. Others would rather know as much as they can about a prospect before deciding whether to make an initial contact.

Designing Web Forms for a Win-Win

Potential customers value both their time and information, and the amount of both they’re willing to give you depends on how valuable your offer is. Research from various sources (.pdf; .pdf) proves that the less information you make visitors provide, the more visitors will respond to your offer.

But people are more than willing to provide their information for the right offer. You create a win-win when prospects get the benefit of your offer for a fair amount of information. Here are some examples.

This type of basic form yields the highest response rate. People are generally willing to give you an email address (usually a secondary email address) so you can send them automated messages about a topic of interest to them. The word wrapping of “First Name” and “Last Name” on the left makes the form look more cumbersome than it needs to be, and the site using this form has a version that doesn’t ask for names at all.

The form above doesn’t tell you anything about the reader. And more information is often needed to be prepared before a sales call.

The company that uses this form requires some details before assigning a representative to contact you. From the information in this form, the lead is pre-qualified: the company knows the approximate size of the opportunity, their competition, and the urgency of need. All reasonable information that a truly interested prospect would provide before getting a call back. This would have no negative impact on response rate.

Asking for Too Much Information

What would happen if this same form were used for signing up for a newsletter? Based on the data, the response rate would plummet — most newsletters aren’t so valuable as to command 11 form fields.

What about a white paper? Many companies require lengthy forms before downloading what amounts to sales material. It’s a win for neither party. Lengthy forms definitely deter downloads: one company we worked with went from 1,000 downloads per month to 30 after introducing a registration form. And the data quality was poor.

A better technique is to provide contextual hyperlinks within your white papers that lead to contact forms like the one above. That way, you get the broadest distribution, leads contact you when they’re interested, and the contextual links let you log what they were interested in.

Gathering Enough Information to Provide Value

The rule of thumb is to gather the minimum information needed at one time to provide consumers value. This doesn’t mean, however, that you should only collect very little information. Trade magazines publishers often give their magazines away for free, but require detailed demographic and contact information.

This InformationWeek subscription form spans 10 screens in height. These publishers profit from the sale of the information they collect, and while most businesses only collect customer information for their own use, the capability of misusing this information has led to legislation — particularly in California.

How California Law Can Affect You, Even When You Aren’t Based in California

When customers trust your company with their information, it’s important to honor that trust. This isn’t legal advice, but it’s important to know some facts when dealing with customer information. The State of California requires that sites have a privacy policy when they collect information from any individual residing in California. The direct quote from the California Business and Professions Code states:

“An operator of a commercial Web site or online service that collects personally identifiable information through the Internet about individual consumers residing in California who use or visit its commercial Web site or online service shall conspicuously post its privacy policy on its Web site…”

Examples of this information can be found at the link above.

Enterprise-level corporations take this law quite seriously and you can see examples by searching Google for “California privacy policy”. Paypal has a comprehensive example that uses plain English to explain a number of technical concepts and the Better Business Bureau provides a sample privacy notice that covers a number of scenarios.

In addition to these examples, the Direct Marketing Association hosts a privacy policy generator that site owners can use to generate their own notices based on the answers to several required questions. And the California Department of Consumer Affairs has one that tried to alleviate misconceptions about how information is used.

By being customer-friendly and providing value in exchange for customers’ information, you will be able to build stronger business relationships. This win-win approach to gathering customer information will not only help your company avoid the perception of abuse but provide a level of service to your customers that could not be achieved, as effectively or quickly, without that information.

Tags: Prospect Conversion

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