September 7, 2010

Can We Know Too Much?

A recent story in the New York Times revealed what many of us behind the curtain already knew: companies know a lot about their customers and, in some cases, their prospects.

“’Now, you’re traveling the Internet with a cookie that indicates you’re this type of consumer: age group X, income level, urban versus rural, presence of children in the household,’ said Trey Barrett, a product leader at Acxiom, one of the companies offering this linking to marketers,” in the article.

Not everyone sees this as beneficial as you might expect:

“But consumer advocates say such unseen tracking is troubling. On the old Internet, nobody knew you were a dog. On the new targeted Internet, they now know what kind of dog you are, your favorite leash color, the last time you had fleas and the date you were neutered,” the article continued.

One question that I’ve always wondered is: Why doesn’t someone just ask and offer consumers something for their cooperation?

All of the information gleaned is used to try to create value. It is used to hone offers, improve products and services, or sold to others who would like to use it. This targeting — it feels like business people are acting like snipers ready to shoot consumers — benefits all except the consumer herself. And let’s not kid ourselves that the privilege of receiving special offers is a tangible benefit — the acceptable response rates are so low that it is obvious that marketers aren’t all that good at delivering a truly compelling message to the right person at the right time.

However, if a consumer were compensated based on the value of the information about her — either given or gleaned — she might be more willing to part with really useful information such as when she plans to replace that Volvo and what she’s looking for in a new car, what offer might actually compel her to switch cable companies, or whether that onesie she purchased was for a shower gift or a baby she’s expecting herself.

Bringing the consumer into the tent would improve the quality of information, lessen fears about privacy, and deepen relationships. I can even imagine a consumer giving a data management company the exclusive right to his or her profile information in exchange for security, intelligent management (buying one tie does not mean that one wants 20 menswear catalogs) and some share of  her “data value” (even if in the form of coupons, frequent flier miles, or other non-cash rewards).

Those who collect data will always create distrust while there is a them-and-us relationship will the people whose information they collect. Give people a benefit for cooperating and eveyone will be a lot happier — isn’t being benefit-driven the oldest marketing rule in the book?

What do you think?

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About Eric McNulty
Editorial Director Eric J. McNulty most recently served as Managing Director of Conferences for Harvard Business Publishing. In this role he was responsible for the company's global conference and event business. His primary responsibility was editorial development and he oversaw production and marketing of both virtual and in-person programs. Eric has also written for Harvard Business Review, Harvard Management Update, Marketwatch, Strategy & Innovation, the Boston Business Journal, and Worthwhile magazine. He edited Harvard Business Publishing's Innovation Alert e-newsletter for two years and has worked with such thought leaders as Clayton Christensen, Thomas Davenport, Vijay Govindarajan, Gary Hamel, Jeanne Harris, Chan Kim, and Renee Mauborgne through Harvard Business Publishing events. Prior to joining Harvard Business Publishing, Eric was principal and founder of PM Collaborative – a marketing strategy consultancy serving clients such as Infiniti Motor Corporation, Legal Sea Foods, Cybersmith, and others. Previously he served in management and marketing roles at European Travel & Life magazine, Mark Cross, and Bloomingdale's.

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