January 19, 2001, 12:00 AM

Privacy gets the sale

To be successful online, businesses must provide the personalized service that Web shoppers want and take steps to ensure privacy and security, according to a new (www.ibm.com/services) IBM Corp. survey on consumer privacy attitudes in the U.S., the U.K. and Germany. The IBM Multi-National Consumer Privacy Study underscores consumer interest in online privacy protection, says IBM. The report also suggests businesses with good privacy policies and procedures gain a competitive advantage over those that don't.

The survey, conducted by (www.harrisinteractive.com) Louis Harris & Associates, indicates that consumers who are more likely to shop online-typically those with more education, disposable income and some tech knowledge-are also more likely to be concerned about online privacy and will take steps to protect personal information.

The key finding, says J.C. Slemp III, Director, e-business Security & Privacy, IBM Global Services, is "a clear consumer desire for merchants and service providers to proactively address online privacy concerns and establish policies that strengthen trust and confidence."

According to the survey, 47% of the U.S. and U.K. respondents and one-fourth of the German respondents look for a privacy statement on Web sites. Some 63% of the respondents who use the Internet have refused to give information to sites when they have perceived that their private information would be compromised or when privacy policies are unclear. Some 40% of respondents who use the Internet have, at some point, decided not to purchase something online due to privacy concerns. "The importance of helping clients promote trust and confidence among customers both on and off the Internet should not be underestimated," Slemp says. "If a customer leaves your Web site without making a purchase because of a concern for privacy, then your privacy policies and procedures are not where they should be."

Other findings show that while most people believe businesses handle information appropriately, Web businesses-versus bricks and mortar-are at the low end in terms of trust and confidence results, with fewer consumers saying that they trust how those businesses handle information. Americans are most active when it comes to protecting their privacy, says IBM, and are twice as likely to ask to examine personal files. Consumers in all three nations believe privacy policies are essential to them when they are online, regardless of country-imposed legislation.

In addition to the consumer study, preliminary data from a separate IBM privacy survey of U.S., U.K. and German executives from the retail, health care, financial services and insurance industries suggests a "perception gap" exists among executives and consumers-consumers tend to express less confidence than executives believe. Results suggest that executives underestimate the extent to which consumers take measures to protect their privacy both online and offline.

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