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Smart Answers


Frontier -- Smart Answers

Smart Answers

Q: I'm starting an e-commerce site that will be gathering demographic information. What's the best way to capitalize on the data? --E.A., PhiladelphiaA: Marketing on the Web is driven not by demographics but psychographics: peoples' preferences, tastes, and values. Along with names, you need to gather information about attitudes and behaviors. What did customers buy on your site? What else do they buy online? What Web sites do they visit? That kind of detailed information will truly add value to your marketing data.

But before you collect any information about your customers, make sure you fully disclose your intentions. "If you don't let them know, it's suicide--you'll never get a sale from that person again," says Rob Frankel, a new-media branding consultant. Give people the ability to opt out, and if they do, keep their data in-house.

You may have little choice. Customers are increasingly reluctant to divulge personal data. And pending legislation would require sites to notify customers about data being collected and its use, with violators facing severe penalties. So tread carefully. A happy customer is worth more than any list of names.

Have a question about running your small company? Send an e-mail to frontier@businessweek.comBy Karen E. Klein


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