Privacy: How Quaint
By Al McClain
In the “good old days,” consumer privacy issues were relegated to things like cutting up old credit cards, destroying receipts, and hoping the waiter didn’t write down your credit
card number. We soon progressed to the “do not call” list, spam filters, and junk mail blacklists. Those issues were complemented by what online retailers might do
with information you entered while shopping, and whether or not “brick and mortar” retailers were keeping records of your purchases. Then, of course, we had e-tailers like
Amazon that collected information on your shopping habits, and marketed to you accordingly.
While some of those challenges have gone by the wayside — the “do not call” list seems to work pretty well — we now can add to the list new issues like Google serving up ads
based on e-mail content (for gmail users), the tracking of keyword searches, and the ability of anyone to do a Google or Yahoo search on anybody, anytime – digging up all kinds
of things. And, of course, postings made by individuals on the web stick around potentially for a very long time.
For retailers and marketers, a number of new issues emerge:
- What do you track about your web customers, what do you retain, and for how long?
- What are you willing to release to government authorities and when?
- Do you track only actual shopping habits, or do you try to track browsing habits to do better targeted marketing?
- Are your in-store tracking polices and your online policies consistent, and does it matter?
At the 2006 Wharton Technology Conference, Gil Brodnitz, a partner at Accenture, said, “In a world of photo traffic tickets and warrantless searches, what Google does with my
personal information doesn’t bother me.”
However, he also commented that, “Everybody wants a privacy policy, but nobody wants to read it. What companies need to realize is that people want the ability to opt-out
even if they never do it.”
Moderator’s comment: What do you consider as “best practices” for tracking consumers online?
Consumers are no doubt OK with personalized offers that bring them better shopping deals and/or that give them a better shopping experience. But, they
are certainly not going to be happy with marketers who stumble and do anything viewed as intrusive. –
Al McClain – Moderator
Privacy abuse will escalate the marketing costs sharply. In the 1950’s, everyone wanted his/her name in the phone book. After telemarketing became common, the annoyance levels led people to become unlisted, which punished the remaining population, which resulted in more anger. Even without the Do Not Call laws, the telemarketing anger level is so high that it’s not that effective. More and more people are getting multiple e-mail addresses and using pseudonyms for their online activity. And who doesn’t have a pop-up blocker? So the intrusive tracking is getting less effective. Even if legislation isn’t enacted or becomes impractical, bad manners lead to counter-moves. And people might not bother to distinguish between the firms that behave themselves and the firms that don’t.
Information is the key to power on the Internet. Our personal information is not only valuable, but what anyone does with it should be not only our own private concern, but the concern of whomever we entrust it with. That we only have a few companies like Google willing to stand up for our personal freedoms is very disconcerting. Perhaps even more so is the fact that most people don’t even care what happens to their personal information, nor think about the consequences when this leads to illegal electronic searches, illegal seizure, and illegal monitoring, when these rights are afforded to us and fought for every day when we are at war. Information is now the commerce of the Internet, and our inability to confront its abuse head-on is very disconcerting.
The simple obvious solution is to only use opt-in rather than opt-out and to make sure it is prominently displayed. I realise that there are far more people who couldn’t care less than totally paranoid fearmongers like me but as long as people have the choice then they have no excuse for not knowing what can be done with their personal information. It’s the transparency that’s important, however. Plus the ability to opt out at any time if they change their minds. The genie can’t be shoved back in his bottle very easily but his further movements can and should be curtailed if people decide that their privacy is actually important to them.
I assume that retailers gather all this information for the purpose of knowing their customers better and, in turn, knowing how to market to them better. However, as we have said many times in these discussions, the retail world is full of poor service, poor quality goods, poor layouts and web sites, etc.
Our data:
96% of customer expectations are met at a 70% rating or worse.
92% of customer service is below a 70% rating.
91% of products and services fit the market below a rating of 70%.
100% of retail organizations are 70% efficient or worse.
Gathering customer data is easy, it is “cool,” and management has come to expect it. Retail management as a whole has had a very difficult time making significant improvement in core functions of the business, and as a result have come to see their level of effectiveness as “good enough.” Besides, all of their competitors operate at about the same level.
Gathering and tabulating all this customer data is a waste of time if the core functions of the business operate weakly; and conversely, if the core functions operate well, there is practically no need to gather this data. Retail’s focus on this area is prime evidence of the ongoing weakness in retail’s overall effectiveness.
It’s impossible to identify “best practices” for tracking consumers online because we don’t know what we don’t know. What’s “best” for the consumer may not be “best” for the data collector, and vice versa. And, we have no freakin’ idea how our data is actually being used by Amazon and others, with no basis for comparison between the various data collectors.
Full, verifiable disclosure by data collectors of all the various ways in which they use our information should be a legal requirement. Under the auspices of the FCC, data-use “auditors” should be employed to monitor adherence to a set of laws crafted to protect us, just as they protect us from mail fraud and wire fraud.