Customers Control Privacy; Business Builds Loyalty

Feb 14, 2005

By John Hennessy

As reported by Don Peppers and Martha Rogers Ph.D., in Inside 1to1 Privacy, in order for customers to get certain benefits with HP products, they must share some information. Rather than assume customers wish to accept these terms — in order to, say, set up automatic ordering for printer ink replacements — HP has begun an enterprise-wide Design for Privacy initiative that gives customers control over how much data they wish to share.

“We are customers ourselves,” says Beth Nidzieko, engineering program manager in HP’s Imaging and Print Division, “so what we did made sense to us as consumers as well as developers.”

What they did is include greater notice and choice for customers in the software that ships with HP products. For example, all inkjet customers used to be invited to participate in market research programs. Now, only those who choose to install the market research component of their software receive invitations.

Mark Albrecht, consumer privacy manager in HP’s Imaging and Printing division says, “We expect fewer support calls and a general increase in customer satisfaction. This increased satisfaction will translate into revenue as we better retain the customer we have and turn more of our customers into HP evangelists.”

“The most important factor is building loyalty with our customers,” Albrecht says.

Moderator’s Comment: What other loyalty marketing components can benefit from a shopper-based implementation approach and how?

Giving shoppers choices and respecting their wishes gives them confidence that you’re paying attention and that their information is being handled properly.
The result should be a more satisfied customer and a more efficient and effective loyalty program.

HP may have lost their leader but they’re still doing some things very well. It’s much better to be up front about the exchange of even the most trivial
information. Consumers want to know why the exchange of information is necessary, and how they stand to benefit. And if they don’t like the trade, they don’t need to participate.

Quicken, noted for its customer approach to its products, got into trouble by somehow misplacing its customer orientation compass a few years back. To prevent
pirating, they installed a software component that was intrusive and limiting. They received quite a backlash that could have been avoided if they had considered what their customers

John Hennessy – Moderator

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5 Comments on "Customers Control Privacy; Business Builds Loyalty"

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Bernice Hurst
16 years 11 days ago

Just bought a brand new toaster from Kenwood last week (I believe they sell in US as well as UK?) and had a lengthy form to fill in to register it. All I wanted was to ensure that my warranty was registered so filled in the basics of name, address, serial number only and ignored all the bits about my age, income, preferences etc etc. If the toaster breaks down and I have to claim on the warranty, they’d better not dare say it’s void because I didn’t answer all of their irrelevant and intrusive questions.

Al McClain
Al McClain
16 years 11 days ago

Wanted to know more about this approach so I clicked on the link to the Peppers and Rogers story. But, I couldn’t read it because I needed to REGISTER first. Any registration program will do better if it 1) asks for just the information that is really going to be used; and 2) tells the consumer what is going to be done with it. Consumers will still resent what Bernice calls “intrusive” questions, especially on income and ethnicity, but will provide more information all around if the company is brief about why they want the info.,.what they will do with it, and make the info. required short and sweet.

Peter Fader
16 years 11 days ago

Barring egregious violations of consumer privacy, I don’t think there’s any noticeable relationship between a company’s privacy policy and the behavioral loyalty of its customers. People are more influenced by mundane factors, such as product packaging (which, in the case of HP Inkjet refills, isn’t very good).

Mark Hunter
Mark Hunter
16 years 11 days ago

Building customer loyalty based on how much information a consumer wants to share will not result in much of a change. If anything, it runs the risk of making consumers even more skeptical of what happens to information they share. End result could be fewer people registering items they purchase, signing up loyalty cards, etc that require anything more than the most mundane of information.

M. Jericho Banks PhD
M. Jericho Banks PhD
16 years 11 days ago

CMM (Customer-Managed Marketing) is slowly replacing CRM (Customer Relationship Management). I never understood how one can manage relationships – which to me is an oxymoron – but that’s coming from a guy with two divorces.

John Hennessey is a remarkably astute and intuitive marketer, and is probably seeing something in HP’s “Design for Privacy” initiative that I’m missing. But to me, it’s not much of an epiphany to decide to treat customers as you’d like to be treated. Golden Rule, walking in another’s moccasins, etc.

Loyalty marketing needs to put power and control in the hands of customers. Anything that doesn’t move in that direction is a waste of time. Anything.


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