Are you set up to quickly notify your customers when stuff happens? We have effective solutions for retailers, manufactures, financial services, healthcare providers, and businesses that store Personal Identifiable Information (PII).
When things go wrong, a rapid notification to those affected can help minimize damage. In the world of commerce, many bad things can happen that require organizations to communicate urgently with their customers or patients.
To name a few: When products fail it may cause safety concerns, deliveries slip, software errors cause technical problems, authentication issues occur, cyberattacks result in personal PII exposure, food becomes contaminated, and so on.
In some cases, there are regulations that require organizations to communicate with customers in a timely manner to ensure safety and privacy policies are upheld, or to prevent fraud. In other cases, continuously delivering a good customer experience is best practice, especially when things go haywire. To ensure timely notifications, businesses should collect and maintain accurate and up-to-date customer contact data. When stuff happens, you are ready to act quickly.
Recalls and cyberattacks call for immediate response
When product safety or food/drug contamination occurs, suppliers are required to report issues to the appropriate government agency who then decides if a recall is necessary. Every year there are thousands of recalls. Recalls cover motor vehicles, boats, food, drugs, cosmetics, consumer products, and environmental products. For large recalls the costs can be significant. According to Statistica1, the costs of the top five recalls runs into $billions.
In addition to the cost of remedying an issue, the communications costs can also be substantial. For drug and grocery stores, customer lists aren’t generally available. When a recall hits, suppliers must rely on broadcast advertising to get the word out. Similarly, for other products where consumer safety is at risk, widespread communication is recommended.
The Consumer Product Safety Commission (CPSC)2, a government agency, begins looking into products after companies or consumers report issues. They oversee around 15,000 products consumers use every day and typically recall up to 400 products annually. The Food and Drug Administration recalls about 4500 drugs and medical devices3 a year and, together with the U.S. Department of Agriculture Food Safety and Inspection Service, about 3504 food products. The National Highway Safety Administration5 is responsible for approximately 700 recalls a year, affecting tens of millions of vehicles.
Despite the efforts of the agencies, manufacturers, providers, and suppliers, recalls are not as effective as they might be. The CPSC states that most recalls have a 65 percent effective rate, meaning 35 percent of products are not returned or fixed. Once a recall is issued, companies are required to pull the product from their shelves but can still be financially liable if their products do harm or they continue to sell products that have not been repaired. Agency fines occur infrequently but can be substantial.
Another growing problem: Cyber-attacks. Statistica6 reports that in 2020 there were 1001 reported data breaches in the USA, down from a peak of 1631 in 2017 but following the alarming trend of approximately 13 percent increase year over year since 2005. All 50 states have regulations to protect their citizens in the event of a data breach that exposes their PII. Breached entities are required to notify the affected consumers in a timely fashion. Fines for non-compliance vary by state but can be substantial.
What this means for healthcare
There is currently no general federal breach notification law, but HIPAA (Health Information Privacy and Accountability Act) does cover protected health information (PHI). Organizations subject to HIPAA regulations are called covered entities and include health plans, health care providers, and health care clearinghouses. While non-covered entities aren’t subject to HIPAA regulations per se, the law requires that they ensure the products or services they offer, or use don’t compromise patient privacy. Non-covered entities with access to or who store PHI include:
- Health social media apps
- Wearables such as FitBit
- Personal Health Record (PHR) vendors
- Personal record storage such as exercise and calories intake log
- Providers who don't have any records in electronic forms, such as some counselors
Recently the Federal Trade Commission issued a statement7 affirming that health apps and connected devices that collect or use consumers’ health information must comply with the HIPAA Health Breach Notification Rule, requiring consumer notification when health data is breached. As with other HIPAA compliance infringements, fines for failing to notify affected consumers in a timely fashion are stiff.
How accurate data can help
The dilemma: Suppliers and providers don’t want consumers to be harmed in any way, but they also want to protect their reputations and remain in compliance. Advertising the recall or breach is not only costly but could also be damaging. One way to reduce this concern is to collect and maintain accurate contact data on customers—email, phone, and mailing address.
Verified emails, phone numbers, and mailing addresses can help you effectively reach your consumers and stay connected. This can be done via e-commerce, loyalty programs, registration forms, user groups, website content, online forms, and so on. (We have the perfect real-time contact data validation solution ready for you to try!)
While not 100% foolproof, collecting valid contact data—and maintaining it—allows organizations to reach customers quickly and directly. In the best-case scenario, organizations can connect with their most frequent and loyal customers to provide their own, even personalized, response before issues reach the media. Additionally, when direct communication is possible, it can help reduce the need for and cost of advertising.
To maintain customer satisfaction, especially in times of stress, it’s important to notify your clients as quickly as possible—and provide them an explanation, remedy, and support. Reliable contact data powers you to reach your customers effectively and efficiently when stuff happens.
Read more about Experian’s contact data validation solutions here.
