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Big Data for Marketing: Respect Consumer Privacy or Get Burned

18.06.2012
Many companies are pursuing Big Data with the ultimate aim of better understanding and selling to their customers. After all, it is well-understood at this point that even basic personalization, like using customers' individual names, can substantially increase open and response rates for physical and digital mail. And Big Data promises a far greater degree of personalization and targeting. But collecting that data can be like handling a live wire: You can wind up having a real bad day if you don't treat it with respect.

"The pursuit of data is really the pursuit of relevant communications," says Dan Kohn, vice president of corporate marketing at Pitney Bowes, which recently conducted a survey of consumers in France, Germany, the U.K. and the U.S. and their feelings about the collection of personal information. "When data is our goal, we've got to get there in a step-wise fashion and with respect. You want to build for the longer haul-build a relationship of trust and build the brand. When you go for the short-term, that's where the pitfalls are. Every interaction is a chance to build trust or potentially wreck it."

Kohn says that the Pitney Bowes survey found that consumers are aware of the value of their data, and they also value their privacy. The survey found one-third of consumers across France, Germany, the U.K. and the U.S. are unwilling to trust any type of organization with their personal data. But for the most part, consumers are ready to part with certain types of data so long as they perceive a benefit in doing so; however, they will hold other data close no matter what.

Willing to Share Personal Data, but Privacy Is Important

A recent Eurobarometer survey conducted by the European Commission found that 74 percent of Europeans have increasingly come to see disclosing personal information as part of modern life, but 43 percent believe they have been asked for more personal information than necessary. And a study by the College of Business in Illinois found that prospective customers become irritated when they receive email with personalized information that has nothing to do with the content of the email. That study concluded that, at best, consumers view such communications as pushy. In extreme cases, customers feel threatened that companies know so much about them. Also, a recent McCann Worldwide Group report found that 56 percent of respondents said that when they consider sharing data with a company, a commitment from that company to not share personal information with a third party was of critical importance.

"When we look at consumer activity online, it is clear that although consumers worry about the collection and use of their online data, they will continue with online tasks and exchange their data if they perceive a benefit," Forrester Research concludes in a recent report.