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Are You Using Customer Data Ethically?

Are You Using Customer Data Ethically?

by Roseanne LuthDecember 9, 2015

shutterstock_242756941Today’s businesses have the ability to know more about their customers than ever before.

According to a recent Pew survey, 74% of Americans believe control over personal information is “very important,” yet only 9% believe they have such control.  While legislation over the past few years has somewhat limited the consumer information companies and social media channels can collect, Big Data has exploded, much of it due to the ease with which consumers share personal details.

The law-making government doesn’t even have clean hands when it comes to collecting citizens’ information. With the phone-tapping the National Security Agency has conducted over the past 10 years, it’s no surprise that the same Pew study found that 65% of American adults believe limits on government ability to collect telephone and Internet data fall far short.

Let’s be clear, however. If Americans felt that passionately about their privacy, they wouldn’t be turning over all kinds of details to social channels and companies. Sports Authority CMO Ron Stoupa explains, “The reality is that the consumer is willing to hand over a lot of data. They will give marketers information that you can’t find any other place. However, the consumer has high expectations that marketers/firms will use the information effectively.” So while marketers enjoy some privilege collecting this data from customers, they also have great responsibility to:

  1. Take the utmost precaution to respect the customer’s privacy.
  2. Use the information primarily and even solely to create the products and services that will improve lives.

These two guiding principles must serve as the staples for any company marketing data program. Under them, we believe companies should incorporate the following tactics into their company code of ethics as pertains to gathering customer data.

  • Real-time customer awareness: Take the extra steps necessary to inform consumers that you are tracking their movements, purchases, and even social media interactions. With more companies now able to track Americans via their GPS, location-based tracking will only grow.  
  • Data usage: Those of us collecting data need to provide a transparent view of how we use and/or sell the data we collect. This transparency takes the form of clear, written, and even spoken communications.
  • Clear user opt-in: Always allow the user or customer to opt-in to their data usage. A consumer’s data gets used and reused, often in ways that were inconceivable at the time the data was collected. If there are changes to the data usage policy, the user should be informed.
  • Accessible privacy settings: Sure customers can change their privacy settings, but do they have the ability or time to do it correctly? Changing privacy settings on Facebook, for example, leads users down an overwhelming network of rabbit holes. With 170 custom privacy options, users can end up giving away more than they protect. When gathering data, the burden is on the data collector to make it clear and simple for the consumer to limit the data they share.
  • Company focus on customer privacy: Data aggregators must cultivate a company culture that values putting customer privacy FIRST. Microsoft took this call to action seriously by incorporating features that block third party ads and content.
  • Use consumer information to create the most helpful products and services: The unspoken understanding between customers and those collecting their data centers on the fun, free, helpful gadgets and information the collector provides. Giving Google one’s location leads to finding the fastest route to a destination via Google Maps.

In another example, Netflix used subscribers’ past viewing history to benefit their customers . . . and let them know they were doing so. In fact, they ran a public competition for software developers to create their acclaimed recommendation engine. (The winner received $1,000,000.) Now, users find movies based on their tastes and history much faster. When consumers can grasp the benefit they receive from making their habits known, they’re more willing to let the company collect their data. More of an emphasis on using data to benefit the consumer will go farther in removing the negative perception of data collection.

  • Limit data collection to only what’s necessary to provide services: Companies that aggregate data don’t need to know about aspects of their customers’ lives outside of that which impacts the services and products they provide.
  • Give consumers the right to limit data going to third-party analytical systems: Consumers and users check the yes box often unaware that their data will be sold to others. The burden remains with data collectors to make it clear that massive, third-party analytical systems may be turning this data into leads, the gold standard for marketers.

Using the right ethics for data collection and data use can positively impact the lives of consumers. Through clear communication and pure motives, that data can help our companies tailor products, services, marketing efforts, and more, resulting in happy consumers who have access to everything they could possibly want.  

About The Author
Roseanne Luth
Roseanne Luth
Roseanne Luth is the founder and president of Luth Research, a privately held market research company founded in 1977 and located in San Diego, California. Roseanne’s commitment to quality is evident at Luth Research, the full-service, client-oriented research firm. With over 300 highly trained and dedicated employees, Luth Research provides cross platform digital tracking, complete custom research support, telephone, focus group, field service capabilities and on-line surveying.