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Private Lives: Using Data to Understand Your Customers
How do marketers ensure that prudence wins over temptation?
Posted Feb 1, 2006
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In the marriage of marketing and technology, it seems that anything is possible. A marketer's ability to capture and use personal data seems advanced right now, but it may be in its infancy compared with a decade hence. One thing is certain: It will be a delicate challenge to find the balance between acquiring as much data as possible without infringing on a consumer's right to privacy. Right now, technology provides access, at least in theory, to data that addresses everything from where we drive, whom we call, what we buy, and even how high our cholesterol level has risen. Everything we do leaves a trail, and technology actively follows it as each piece of data travels through any number of systems owned by different corporations. Of course, the tools are now available to process, aggregate, and calibrate these vast amounts of information, toward the end goal: a full 360-degree view of individual customer behavior. Yet the corresponding temptation is to take personalization technologies too far--going over to the dark side where privacy invasion, unethical information use, and/or accidental release enter the picture. To be sure, consumers want control over their own personal data. But how do marketers ensure that prudence wins over temptation? Consider the following tips: 1. Know the rules of the road. Marketers must abide by a complex web of laws about what information they can use and distribute about their consumers that varies by country and even state to state. Make sure you have the best counsel to make sure that your decisions are sound. 2. Make your information policy transparent. The Direct Marketers Association (DMA) believes that at the very least, marketers operating online sites should make available their information policies to consumers in a prominent place. The organization even provides a tool, The DMA's Privacy Policy Generator, which allows a company to create and post a privacy policy statement. 3. Learn how to give and take. Different people have varying levels of tolerance for how that information is used. Some people welcome the targeted offers that we can deliver by using their personal information. Maritz has found, for example, that three quarters of high income earners (households with incomes over $125,000) would be more willing to provide personal information to their banks if it would lead to a richer rewards program.
4. Ask permission. Through permission-based marketing--opt-in emails are an example--a company allows the consumer to give permission for the company to market its goods and services to that consumer. Similarly, adsertor marketing gives a consumer ownership of their name as a transferable earning asset, as well as the marketing, financial and demographic information attached to it. There are many trends to manage simultaneously: data collection and distribution techniques have become more sophisticated; marketers have devised more and better ways of putting that data collection to work; consumers are increasingly worried about the privacy of personal information; and CRM as a business tool is here to stay. Most marketing officers hope that these cross-currents of change in marketing technology are pointing toward a win-win, where customer relationship marketing is as cost-effective as it can possibly be, without crossing the line where privacy concerns kick in and customer alienation begins. About the Author Abbi Wheeler-Dolittle is Maritz Loyalty Marketing's director of business analysis. Her primary responsibilities include developing rigorous database marketing strategies for clients. Abbi also brings experience in market research, marketing communications, brand equity research, and developing/implementing brand strategy. Her areas of expertise include database marketing and statistical modeling. Abbi holds an MS and a Ph.D. from Cornell University in applied economics, with an emphasis in quantitative marketing. She holds a BS in economics from William Smith College. Please visit www.maritzloyalty.com
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