Privacy And CRM -- How Far Can You Go?

Here's how customer relationship management used to work: A couple sits down for dinner at an upscale restaurant in the city. They order chicken, steamed vegetables, salad, and a very nice bottle of red wine -- very nice even for a high-end restaurant. Dinner is wonderful, the service is great, and a second bottle of wine follows the first. The waiter makes sure the couple has everything they need during dinner and they leave, having enjoyed a satisfying experience.

The likelihood of their returning in the near future is high.

Not only did the restaurant do a good job of marketing itself to the couple, but at the same time additional behind-the-scenes marketing opportunities were being taken advantage of to improve the restaurant's bottom line. As the waiter keyed the couple's order into the order-entry system, the order was merged with the couple's credit card history and the information dispatched to marketers across the globe, without the customers' knowledge or permission. Over the next few weeks, the couple receives tempting offers in the mail for subscriptions to food and wine magazines, as well as offers from local restaurants to participate in wine tastings and special dinners.

This is offline marketing at its most effective, isn't it? Yet, clearly, it is intrusive to the couple's privacy! Still, because of the timeliness and relevance of the offers, the convenience, the couple takes advantage of quite a few of them.

With hundreds of millions of conversations going on at any given point in time -- conversations that can be tapped into to satisfy the needs of both consumers and marketers -- it's time for e-marketers to wake up and start implementing what their offline counterparts have been doing for years: listening to the customer and using the information gathered to meet their customers' purchasing needs, while additionally taking on the responsibility of taking their customers' needs for privacy and protection seriously.

Many consumers have concerns about the Internet's intrusiveness in their lives and the subsequent loss of individual privacy, but the truth is that it's a great deal less of an issue than most people imagine. Why? Because whether you acknowledge it or not, the privacy ship has sailed. There is no more privacy, not in the way that it used to be defined.

Everything that people say about themselves online, and everything that other people say about them, is captured and recorded forever on the Internet. Although concerns about the availability of online information and stemming the tide of that information used by marketers are the equivalent of tilting at windmills, concerns about the abuse of that same information is real ... and needs to be dealt with to protect consumers.

It is the online marketer's job to understand this and to never abuse the trust that is core to the opt-in process. She or he must take advantage of the flip side of the loss of privacy and use it to bolster customers' convenience.

A simple pre-Internet example of what I'm talking about is the use of membership cards at supermarkets. For the consumer, it might have been unsettling at first to possess a card that recorded his every purchase, that noted when and where and how often purchases are made. However, he soon realized how convenient it was to be reminded of items that should be on his list, to be given special prices on those items, and to receive coupons for other products that he could be interested in.

The fact that the shopper's information is being stored in a database and used for many reasons other than those affording him more convenience and better prices is often ignored or minimized. The consumer overlooks the uses that marketers might make of it: giving his name to others in a co-registration situation, for example, or used to generate incremental revenue by selling his information to other marketers without his permission.

There are reasons for consumers to have legitimate concerns. If marketers persist in this practice, it could threaten the greater purpose of marketing, which is to create the most convenient possible shopping experience for people who have given specific companies their trust.

It's that convenience that is the online marketer's stock in trade. What I call chatter marketing inserts the marketer into the consumer's purchasing process, from research to check-out, much earlier than is the case with traditional marketing efforts. And what could be more convenient for the consumer? If I'm considering buying a camping tent but have only gotten as far as asking my Facebook and LinkedIn contacts for their opinions about camping, wouldn't it be amazingly convenient to have a camping equipment retailer -- one who occasionally sends me emails and who I've purchased from in the past -- contact me and indicate an understanding of my requirements, who can answer my questions and give me a special rate on precisely the tent I need?

It doesn't get much easier than that. Offline or online, use your customers' information wisely and with their consent, and your CRM goals will be met.

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