How to use privacy seals to improve privacy practices and increase sales

Privacy Impacts Purchasing: Top Ways Companies Can Use Online Testing and Privacy Seals to Improve Privacy Practices and Increase Sales Carolyn Hodge, Marketing Director, TRUSTe Jamie Roche, President, Offermatica Tess Koleczek, Chief Privacy Officer, E-LOAN 1

Agenda TRUSTe – ROI of Privacy: Earning Trust, Building Business Consumer attitude and research around privacy Privacy trust builders & eroders Offermatica – Online Privacy Practices: Stop Guessing and Start Testing Explanation of testing & how it works Specific client cases regarding security and privacy seals E-LOAN – Privacy: What’s it worth? How to mobilize testing internally How to use ROI testing to build privacy budgets and business relevance Q&A 2

ROI OF PRIVACY EARNING TRUST, BUILDING BUSINESS Carolyn Hodge Director of Marketing Proprietary and Confidential to TRUSTe 3

ROI OF PRIVACY Agenda • Consumer privacy attitudes survey • ROI case studies • 2007 Most Trusted Companies for Privacy • What you can do to influence customer attitudes and behavior. Proprietary and Confidential to TRUSTe 4

CONFUSION ON PRIVACY IS WIDESPREAD A majority of consumers are confused about the role of a Web site’s privacy statement. Fifty-three percent of survey respondents believe that a posted privacy statement means the organization “will never sell or give any of my personal information to anyone else.” Proprietary and Confidential to TRUSTe 5

PROTECTIVE ACTIONS NOT PURSUED • 45 percent have used more than one email address so that one is reserved solely for their personal communication • 43 percent have read privacy policies • 33 percent have provided email addresses and information that would not identify them personally • 33 percent have changed passwords on a regular basis • 26 percent have looked for third-party seals or certification Proprietary and Confidential to TRUSTe 6

TRUST IMPACTS BEHAVIOR The survey shows that consumer trust online impacts behavior. In the past six months: • 71 percent of respondents have decided against registering or making a purchase online because those actions required them to provide information that they did not want to divulge. • 41 percent said that, in the past six months, they have provided inaccurate information to Web sites that required personal information which respondents did not want to share. Proprietary and Confidential to TRUSTe 7

PRIVACY TRUST ERODERS Proprietary and Confidential to TRUSTe 8

PRIVACY TRUST BUILDERS Proprietary and Confidential to TRUSTe 9

LEVERS TO BUILD TRUST • Can consumers easily find notice at the time they need? • Easy to navigate and read the notice? • Provide easy access to account information and ability to change it? • Can you easily delete or deactivate an account? • What are cookie practices and how are they disclosed? • Choice for sharing in and out of network? • Third party seals present with redress mechanism? • Have the sites had any breaches or public incidents in past 12 months? • What is governance structure for privacy? • Security for transactions and sensitive information? Proprietary and Confidential to TRUSTe 10

USERS WILLING TO PAY MORE FOR PRIVACY • CMU Experimental Study on Privacy Information • People were willing to pay about 60 cents more to protect their privacy for each $15 item purchased. • Low privacy premium 3-5%, High privacy premium 7-10% Proprietary and Confidential to TRUSTe 11

VISIBLE & TANGIBLE ASSURANCE PRODUCES RESULTS CourseAdvisor.com $20,000/week in additional revenue Proprietary and Confidential to TRUSTe 12

Online Privacy Practices: Stop Guessing and Start Testing Jamie Roche, President, Offermatica

What is a Test, Anyway? “A/B…N” and “Multivariate” Tests allow you to measure the effectiveness of websites, landing pages, emails, ads, etc. and/or different elements thereof. Two popular types of tests are: • A/B…N Test: Test “Recipe A” vs. “Recipe B” vs. “Recipe C” and so on • Multivariate Test: Test 3 or more different elements of an online marketing campaign. Copyright 2006, Offermatica Corp. All rights reserved. | Proprietary and Confidential to Offermatica Corp. 14

Ways to Test on Your Web Site Slots • A region on your web page, email, or ad where you can test, target, and optimize content for visitors/viewers. slot slot slot Offers • An offer is content that is slot displayed in a slot (image, html, flash, an entire page or even dynamic content) offer Y offer Z Copyright 2006, Offermatica Corp. All rights reserved. | Proprietary and Confidential to Offermatica Corp. 15

A/B/C/D landing page test results - Stamps.com After running the campaign for 9 days… Total lift of the winning landing page (D) was 13% All segments had the same winning alternative In this case our success metric was just registrations (subscription business model) When testing in our consumer store, we use conversion to purchase, average order value and revenue per visit. A B C D Copyright 2006, Offermatica Corp. All rights reserved. | Proprietary and Confidential to Offermatica Corp. 17

Different Home Page Slots - Audible.com Offer Main Image Form Trust Logo Search Bar Product Ads Testimonial s Copyright 2006, Offermatica Corp. All rights reserved. | Proprietary and Confidential to Offermatica Corp. 19

Audible.com Home Page Elements Main Image Offer Form Trust Logo Search Bar Product Ads Testimoni als Copyright 2006, Offermatica Corp. All rights reserved. | Proprietary and Confidential to Offermatica Corp. 20

Key Results Privacy seal had a 7% influence on engagement Element Winning Alternative Influence on Engagement Main Image Alternative 2 -- Offer Free AudioBook 61% Download (2) Form/No Form Form (1) 11% Trust Trust Logos 7% Search/No Search No Search -- Book Banner Non Clickable -- Testimonials Alternative 2 4% Copyright 2006, Offermatica Corp. All rights reserved. | Proprietary and Confidential to Offermatica Corp. 24

Multivariate Testing Guidelines • Select the elements you believe will have the strongest impact on the results. • You must have at least three elements to test. • It is recommended that elements be independent of each other. (For example, do not test your layout and content in the same test.) • Its recommended that each element must have the same number of alternatives. • For each element, it is recommended to have alternatives that are significantly different from each other. Copyright 2006, Offermatica Corp. All rights reserved. | Proprietary and Confidential to Offermatica Corp. 25

Testing Best Practices Choose your success metric during campaign design. Let campaigns run for a minimum of one week (two weeks is preferable). If possible, always filter testing results by traffic source. Exclude extreme data (i.e. unusually large orders) when evaluating revenue measures. Consider statistical confidence: What is the likelihood that these results will be consistently reproduced? Copyright 2006, Offermatica Corp. All rights reserved. | Proprietary and Confidential to Offermatica Corp. 26

ROI – A New Privacy Concept Why measure ROI for privacy? • Privacy = Trust • Trust gets you three things: – Customer acquisition – Retention throughout the transaction – Repeat business • Those three things translate to revenue. • Revenue gets you noticed within your organization. • Seat at the table gives consumer advocacy a voice in the business. 28 Proprietary & Confidential – E-LOAN, Inc. ©2005

Game Plan: Measuring ROI Getting Started: Six Steps to Demonstrating ROI: • Step 1: Obvious – Review your current situation • Step 2: What is your role in the business? • Step 3: Get down to business • Step 4: Test your theory • Step 5: Build some momentum • Step 6: Make it happen 29 Proprietary & Confidential – E-LOAN, Inc. ©2005

Step 1: Look at the Obvious Your Privacy Policy • Is your policy pro-consumer? • Do customers have an opportunity to view it or even know it exists? • Is the policy readable, aka, would my mom get it? • What are you telling people up front? Or do they have to scroll down the page in order to find something comforting? 30 Proprietary & Confidential – E-LOAN, Inc. ©2005

Step 2: How Does Your Company View YOU? Privacy Team • Are you a participant in key operations & development meetings? (where’s your seat at the table?) • If not, at what stage do you become involved? (driver or rider?) • Can you discuss more than just regulatory requirements and privacy? (do you speak the business language?) • Are you a business person or a privacy cop? Demonstrate that you understand the goals of the business, not just your department. 31 Proprietary & Confidential – E-LOAN, Inc. ©2005

Step 3: Dig A Little Deeper • Location of links to privacy policy • Certifications or seals – are they visible? • Pages where you are “selling” your brand • Points of collection • Type of message your company projects – Value? – Products? – Trust? 32 Proprietary & Confidential – E-LOAN, Inc. ©2005

Examples of Adding Value • Work with Public Relations & Marketing • Pick endorsements or certifications that add value • Find appropriate locations for display 34 Proprietary & Confidential – E-LOAN, Inc. ©2005

Financial Benefits • Measuring success – TRUSTe logo alone provided a 3-5% bump in application conversions – Newer websites: • TRUSTe logo plus other endorsements provided a 20% increase in conversion rates! – Calculate the benefits: • Every “converted” application = $X • 2000 apps per day = 100 more conversions = $X,000 35 Proprietary & Confidential – E-LOAN, Inc. ©2005

Step 5: Prepare to be Heard • Make a map of the current placement of privacy info - What is the message being projected? • Identify locations that would benefit from a bump in consumer trust & strategically locate info to derive value. – Is there “real estate” available for better messaging? • Offer various combinations of “enhancements” • Get the support of business owners – they want to succeed, too. • Estimate the financial gain for the company – TRUSTe logo alone provided a 3-5% bump • Request testing to prove your point (be persistent!) 36 Proprietary & Confidential – E-LOAN, Inc. ©2005

Step 6: Make It Happen • Sell ideas and benefits to business owners – get their support - Operations - Marketing - Customer Service - Compliance - Legal • Escalate – work the decision-making food chain • Emphasize the bottom line: TRUST = $$ 37 Proprietary & Confidential – E-LOAN, Inc. ©2005

Consumer Advocacy is Good Business • Business reality: Revenue drives most business decisions • Adjust your privacy program to contribute a financial benefit • It takes time & support, so be patient • Use tools already available: – TRUSTe seal – Other certifications (Verisign, ESRB, etc.) – Endorsements (“as seen in WSJ, Forbes, etc.) • Document successes and let executives know your value! 38 Proprietary & Confidential – E-LOAN, Inc. ©2005

Contact Information Carolyn Hodge Director of Marketing TRUSTe chodge@truste.org Jamie Roche President Offermatica jroche@ottodigital.com Tess Koleczek Chief Privacy Officer E-LOAN, Inc. tessk@eloan.com 39

How to use privacy seals to improve privacy practices and increase sales

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