Personalization and Privacy in Perspective

Worried about privacy? You should be. Worried about how to use personalization? No problem: Respect the customer.

For those who like to get to the point immediately, here’s the payoff:

Give me a reason
to give you information
and you can use it
to sell me more stuff.

That is *so* 1995. As in Peppers and Rodgers’ book, The One To One Future. It’s cheaper to sell to a current client than to drum up a new one.

If you know my preferences and my habits, then you can treat me like the individual I am. Your offers will be more interesting. I won’t have to waste time filling in forms and explaining myself to you *again*.

So now that you know the punch line, here’s the philosophy that should inform every step you take along the path to Web site personalization. Here’s the reason that your corporate data security systems should be hardened against corporate raiders: It’s all about respect.

R-E-S-P-E-C-T
Find Out What It Means To Me

What started out as your friendly grocer asking about your health and then remembering you the next time you come in, has turned into a international, over-intrusive, oh-my-god-what-happens-if-it-gets-into-the-wrong-hands, multi-mega-database.

You get that sinking feeling that some insidious individual is watching you for some nefarious purpose. Your innermost thoughts might be sold to other merchants who will flood your mailbox with offers you can’t refuse.

What kind of mail and phone calls would you get if the Christian Coalition should get their hands on your opinions, attitudes, beliefs and buying preferences? What if the Pacifists for Animal Rights knew every time you looked at www.nra.org? What if your boss signs up with a service that lets him know that you went to Career Mosaic three times last week?

Just where, as a card-carrying member of the data-hungry marketing industry, do you stand on the issue of privacy?

Rules, Laws, and Good Marketing

The European Union Data Protection Directive, which was supposed to bring down all of American international marketing data management, was supposed to go into effect in October 1998. It would have forced American companies to be a bit more careful than we’re used to.

There are four basic rules:

1) You have to tell people you are collecting information
about them and what you’re using it for.
2) You have to allow people to decline to be tracked.
3) You have to allow people access to their data so they can
correct it.
4) You have to ensure their data is safe from others prying
eyes.

That first one means you’re not allowed to use personal data for anything except for which it was specifically acquired, unless you have explicit consent. In a nutshell, if you sell somebody a teapot, you’re not allowed to turn around and try to sell them tea, unless they’ve signed a waiver.

If you’re heavy into rules and regulations, you can feed your jones with help from Peter Swire, Associate Professor of Law at the Ohio State University College of Law. He keeps tabs on the issue at www.osu.edu/units/law/swire.htm.

But if you’re simply into good marketing, you’re going to follow these rules anyway. The fact is, if you treat people with respect, you can sell them more stuff. If you don’t, you will be designated a data-nazi.

Jason Catlett runs a company called Junkbusters (www.junkbusters.com) that covers personal privacy and the Web. He e-mailed me the following example of target marketing run amuck:

Dear Mr. Jones:

Our research indicates that you have not bought condoms
at SpiffyMart recently. (Your last purchase was 8 weeks
ago.) Further, you have stopped buying feminine hygiene
products, but have sharply increased your frozen pizza and
dinners usage in the same time frame.

It’s clear that Ms. Jody Sanders and you are no longer “an
item”. (It’s probably for the best — she consistently buys
inexpensive shampoo, and it was obvious that the two of
you were not economically compatible.) The Postal
Service database confirms that she filed a change of
address form. We at Hotflicks International offer our
condolences. As the number-one vender of hot XXX-rated           videos, we want you to know that our products can help
you through this difficult period. When you’re feeling lonely,           check out our unmatched catalog, there is guaranteed to be
something that you’ll want to purchase!

Order from this catalog and we’ll throw in an extra tape
FREE!

Yours Truly,
Hotflicks Marketing Management

Convince me my privacy is important to you. If you collect all sorts of information about me, then your offerings can be more interesting to me. If you treat information about my with respect, I’m going to feel much better about our relationship.

The question that *should* be running around in your head at this point is whether all of this data gathering and protection is worth the trouble.

ROI?

Can you really make money after investing in systems that accommodate true opt-in and true access to all customers? Will it make that much difference in their buying patterns? Yes it will. It will because the focus is on time rather than money.

Oh money’s great, don’t get me wrong. I love the smell of profits in the morning. Absolutely. And as much as your customers love to save a dollar here and get 20% off there, we’re all out of time.

It’s About Time & Trust

Barnsandnoble.com may be a wonderful book store. It may have a fantastic collection of books. It may have lower prices than I’ve ever seen before. But I’m never going to find out.

I’m never going to take the time to tell them where I live, what kind of wrapping paper I like on the gifts I send or what books my uncle likes. I already went through all that with Amazon. We have a relationship. The barrier to switching is way over my toleration threshold and I’m a one-book-site kind a guy.

All through my relationship with Amazon, have tracked me like a bloodhound. They have memorized every book I bought and everything I looked at and every bit of information about me. They have also come through on the promise of their brand and not abused this information – only used it to make my shopping experience more enjoyable.

So it’s not just that I don’t want to train another store in my buying habits, it’s that I already know I can trust Amazon with my innermost book desires – and they won’t sell me down the river.

Capture and control information about your customers and use it to sell them smarter, and they will reward you by buying more stuff. But only if you show them the proper level of respect.