Keys to the Consumer Data Coffer
The good news is, marketers can know so much more about you that they can precisely tailor their marketing messages. The bad news is that marketers can know so much more about you, even when you don't know where they get all that information (much of which you assumed was private) and would prefer your anonymity.
One man's relevance is another man's intrusion. Big Brother has truly arrived, with a grin and a fistful of coupons, perhaps, but it is he nonetheless, and the customer is less than overjoyed.
Will marketers have the good sense and fundamental integrity to respect the customer's privacy voluntarily? Some will; some won't. And, based on experience, you could argue that there is no way to make marketers behave across the board short of legislation and regulation. So there will doubtless be more of that. But customers will find other means to preserve their privacy, and they will guard it ever more jealously and creatively.
Ironically, at the very moment that marketers have come to embrace information-driven, individualized marketing, the customer is running for cover, sensing a new vulnerability in this information age.
What can marketers do to overcome this rightful consumer paranoia? Here are seven do's and don'ts to consider:
• Do create an explicit exchange of value for data, an exchange based on trust and believable safeguards against abuse or third-party disclosure. That explicit exchange has long been a guiding principle of well-designed loyalty marketing programs. For instance, many consumers will gladly reveal travel plans to their airline or hotel clubs in return for special deals or preferential treatment on those trips. Who would mind a car rental company tracking car preferences if it meant guaranteed availability of a preferred car class at the next destination?
• Don't ask for information you don't intend to use. While this sounds like common sense, you would be surprised how many marketers request and store customer data for which they have no legitimate business use. Collect only the amount of personally identifiable information that you need to deliver superior service and support.
• Don't forget to disclose how long you keep data, whether it is combined with information from outside sources and whether it will ever be disclosed to third parties.
• Do allow customers to see, correct and even delete the data you are collecting. This not only improves the accuracy of your information, but it also assures your customers that you have nothing to hide.
• Don't send unsolicited e-mail unless customers have agreed to opt in to your e-mail list. Provide instructions about unsubscribing at the bottom of every e-mail message.
• Do get involved in industry trade associations that advocate self-regulation and the responsible use of customer data. There are groups such as the Personalization Consortium, an international advocacy group that promotes the responsible and beneficial use of technology for personalizing consumer and business relationships. There also is the Privacy Leadership Initiative, which is investing in research on new privacy technologies and will spend $20 million to $30 million on an educational campaign to inform consumers of ways to protect privacy; the Internet Advertising Bureau; and the Direct Marketing Association.
In the future, strategic advantage for marketers no longer will consist of just having customer information. In fact, customer information is fast becoming a commodity. Instead, strategic marketing advantage will arise from having the customer's permission and collaboration in using that information.
• Rick Barlow is chairman/CEO of Frequency Marketing Inc., Cincinnati. Reach him at firstname.lastname@example.org.