RESEARCH & RESOURCES

Everything They Ever Wanted to Know About YOU

The recent revelations about the NSA's data collection highlight privacy issues, which enterprises also face as they build a more complete view of their customers.

Visit a website, make a Facebook entry, contact a call center, tweet a message, or use a loyalty card to receive a discount and chances are your information is being tracked, collected, and consolidated so companies can, in their own words, "serve you better." In the past, this may have been a somewhat arduous and much less extensive process, but technology and economics have made what was once almost impossible an everyday (every click?) and much more comprehensive reality.

Gathering Consumer Data

Obtaining and storing customer data is not a new concept; in fact, most organizations' sales and marketing functions consider this to be one of their most basic tasks. However, in the past this information was likely to be obtained from data provided on warranty registration cards, scouring town hall records, and/or third-party data brokers and aggregators who collected and sold consumer-centric contact information as well as lifestyle, demographic, and psychographic attributes.

As I have discussed in previous articles, organizations can now collect and quickly analyze several orders of magnitude more data than they could have just a few years earlier. Although this data can be analyzed to help increase sales, it may also impinge on individual privacy. Most of us are aware that once something is posted to the Web, it is difficult, if not impossible, to "undo" it. We can all probably cite examples of someone we know having a career setback (e.g., not being hired or perhaps even fired) that resulted from the posting of an inappropriate comment or picture.

Many insurance companies offer discounts to consumers who let them install monitoring devices in their automobiles. How far away are we from the day when genetic tests, which can determine predispositions to certain diseases, will become part of our public profiles and perhaps used by insurance companies to set rates or even deny coverage? GPS and RFID devices can track where we are and when we were there. Furthermore, almost anywhere we travel, our digital image is being captured by a plethora of public and private video devices.

Consumer Reaction

In order to protect their privacy in the face of this constant monitoring, many consumers are now proactively taking steps to hid or conceal their online and even in-store identities.

Take, for example, loyalty cards. Many consumers simply do not want their purchases tracked and provide false names and phone numbers when filling out their applications. The same issues apply to access to free web site documents where similar data is required. I know of several instances of people providing their addresses as "1600 Pennsylvania Avenue, Washington, DC" (the White House) and/or their phone number as "212-555-1212" (New York City information). They also usually provide fictitious e-mail accounts, unless the requested content is being e-mailed to them rather than directly downloaded. Even then, many consumers set up a special e-mail account for e-mailed material and register it with fictitious information. If companies don't filter for these obvious misstatements, they run the risk of polluting their customer/prospect databases with dirty data.

I have also frequently observed cashiers in stores with loyalty cards offering a customer who did not have one the use of a loyalty card the cashier had. Although this definitely enhances customer service, it also corrupts the database and can lead to the cashier being incorrectly identified as one of the company's most loyal customers. At the very least organizations should teach their cashiers about the importance of using the customer's own loyalty card, and, if they wish to allow it, provide the cashiers with a loyalty card that will be recognized as a special account for customers who did not have a loyalty card of their own.

Another example is the use of text analytics and sentiment analysis of tweets and Facebook entries to quickly determine how a product or service is being accepted by the marketplace. This can identify new markets and spot potential problems and issues so they can be quickly resolved. However, a sarcastic entry or regional slang can be easily misinterpreted and cause a negative comment to be viewed as a positive and vice versa. Although much research is being conducted to understand how to effectively automate this process, at the very least, sentiment analysis should not be performed in a vacuum but should be analyzed in the context of the subject under investigation.

The Bottom Line

As companies improve their ability to build a more complete view of their customers and prospects, many of these customers and prospects will attempt to maintain their individual privacy and may take steps to prevent this. Unless organizations take this into account, they may find that they are mining fictitious data or misinterpreting consumer sentiment.

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