Protecting Your Customer Information From Theft – How CRM Can Help

January 10, 2017

Topics: Safety in the Workplace

Businesses today survive or fail based on their ability to develop and maintain client relationships.  CRM (customer relationship management software) is an effective strategy to strengthen and build these relationships.

As a result of its increasing value to businesses, customer information is one of the most commonly stolen items from companies.  This theft usually comes from disgruntled employees, who are increasingly benefiting on the open market from selling such information or using it to increase their value to other potential employers.

In many cases, the law will not protect an employer from theft of mere client names and general company contact information, even if it is a list that is kept secure.  The good news is that, from a legal standpoint, CRM can also be an effective tool to help companies protect the valuable information they obtain concerning their clients and prospects.

Generally, in order to be protected by law, client information must be of such a nature that courts will consider it a “trade secret.”  Traditionally, trade secrets refer to secret processes, formulas or business practices which give one company a competitive advantage over others in its industry, and which the company went to great lengths or expense to gather, create or compile.  Theft of trade secrets is prohibited by law, and courts will stop those that steal trade secrets and require them to pay money damages for their conduct.

Many courts have recognized that certain value-added materials, when included in client lists or databases, can entitle these compilations to trade secret protection. This value- added information goes beyond mere names and contact information, but refers to specific information about a client or potential client which can only be obtained as a result of substantial research and/or a long term relationship with the client.

Examples of this information include clients’ purchasing patterns, preferences and pricing information, seasonal business needs, product/service specifications and other like information.  Similarly, personal information about clients and client contacts can be protectable.  It can include a person’s hobbies, personal activities, educational background, membership in charitable or other organizations, and family information.  This obviously is the same information that an effective CRM program can help a company develop.

In short, coupled with the proper security procedures, policies and other measures that help legally secure client information, CRM helps businesses build a client database that they can protect.