Perils Of Personalization Vs. Privacy

Advancements in Big Data are putting an unprecedented amount of customer information into marketers' hands. Data can now drive decisions that used to be made by gut and guesswork, and this enables companies to gather real insights into the inner workings of their customers. The data points readily available to marketers are surprisingly vast, from Census information to social media habits to Web-browsing behavior to purchase history and more -- and all together, they can be used to predict customer behavior and deliver big-time personalization.

Suffice to say that Big Data is putting the nail in the coffin of one-size-fits-all marketing. Companies are becoming smarter and can determine -- with considerable accuracy -- the best ways to interact with their customers.

The privacy tradeoff

Needless to say, businesses love Big Data. It improves their conversion rates and enables them to be more prudent with their advertising and marketing budgets. The question is, can the same thing be said about consumers? Do customers see the benefits of collecting massive amounts of data for the sake of personalized marketing?



To some extent, yes. Studies suggest that consumers actually appreciate relevant messages and tailored experiences. According to Accenture, three in four online shoppers prefer retailers that use personal information to improve the shopping experience.” Indeed, this is evident in people who are more than happy to share their location (i.e., by checking in) to receive discounts or in customers who readily share their personal information (SSN, address, etc.) to retailers for a store credit card.

But talking about Big Data to consumers from the perspective of providing relevant and better experiences is wholly different from discussing it within the context of privacy. Ask shoppers if they want more personalized offers and many of them would likely nod their heads. However, when the discussion shifts to the types and amount of information being collected, some may start to feel unsure about just how much companies know about them.

The onus falls on companies to address these privacy concerns and help their customers find the balance between their desire for better experiences and their reluctance to give out information.

The real concerns of consumers

The first step is to determine what it is exactly about data collection that really bothers people. A recent survey by Pew Research Center shed some light into this matter, finding that “86% of adult Internet users have taken steps from time to time to avoid surveillance by other people or organizations."

When respondents were asked who they were trying to avoid, 33% said hackers or criminals, while advertisers came in second with 28%. This suggests that while people do have some mistrust toward advertisers, their chief privacy worry is getting hacked or having their identity stolen.

Consumers are concerned about their privacy -- not necessarily because they don't want companies using their information for marketing purposes (although this is still an issue to some), but mostly because they don't want the contents of their emails being read or their personal information going public.

The best way companies can combat this deep-rooted fear is to proactively communicate that they are not collecting data to access their customers' bank accounts or social profiles, but rather to provide the most relevant information, make their shopping experience more meaningful and treat them like individuals.

Empower customers to take control of their data

Aside from being transparent about what information is being collected and why, companies must also give users more control over their data. One easy way to go about this is by allowing users to opt-in before collecting their information, as well as to provide ample notice in plain English whenever there are business and privacy policy changes.

Customers must also be given the options to export or delete their data. It's their information, after all, and companies should give people the right to completely own it.

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