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Posted on Jul 23, 2012

Why marketers are to blame for privacy issues and what they can do about it

What do you do when your bank or credit card company sends you their policies about Privacy? Do you read it in detail, quickly glance through, or simply toss it into the trash?

I think receiving an entry into the Publishers Clearing House is a lot more fun!

What about online? When considering buying from a new company you just discovered, do you go find and read their Privacy Statement? What about emails from trusted vendors that provide updates on their privacy policies?

The prospect of reading a company’s Privacy Statement is like thinking about a root canal.  “Do I really have to?

On the topic of privacy, most people think about Internet Privacy. In fact, just trying to read the details on Wikipedia will make your head spin. From the technical intricacies of understanding privacy risks to the laws and regulations, this is a topic for geeks and lawyers – what I would call a unique combination of brilliance and confusion put into one room.

Now, step outside the room and consider this:

  • Consumers are inundated with information, online and offline. If they even glanced at a Privacy Statement, they surely don’t read the fine print (except lawyers and geeks).
  • Trust is assumed, until you blow it.  Gone are the days of the general store and building a personal relationship. Now we download apps without even knowing the name of the company who built it.
  • In a complex world, we desire simple and easy. Whoever can deliver on that promise has an advantage. Any fine print longer than about 50 words becomes a potential barrier.

Does this mean companies should choose to ignore consumer privacy? Not at all. It’s more important than ever to understand the value of privacy and what it means to consumers.

The Value of Privacy

As a differentiating value, Privacy means secluded from the presence or view of others; concealed or hidden.

Note what is not stated here. Whose responsibility is it to provide privacy?

Most companies appear to have interpreted the responsibility as belong to them, at least for the small portion they maintain and control. However, based on the ongoing security breaches we see in healthcare, banking, retail, and other industries, where consumers’ personal data is lost or stolen, its clear organizations aren’t doing a very good job.

But how can they? It’s like having 100 different companies insure your car, where one covers your windshield, another the tires, a third one covers the doors, and so on. If you’re in accident, how many claims do you file? How would the various parties assign responsibility? Your claims would be perpetually stuck in arbitration, likely to never be settled.

Such a scenario is both unrealistic and impractical. In the end, you would be better off having no coverage.

The same is true with privacy.

The Empowered Consumer

How much you want something to be concealed, hidden or secluded from the presence of others should be determined by you, the consumer. Privacy is a personal issue and means different things to different people, even depending on the topic, timing, and location.

Many consumers are choosing to post lots of personal information on various health-related sites, such as Patients Like Me, Stupid Cancer, Inspire and even Microsoft Health Vault. The control and responsibility always remains with the consumer.

In addition, many consumers allow various software programs – on their computer, in the cloud, and across the Internet – to store their credit card and banking information. Why? Because it makes their life easier and simpler.

Of course, all organizations have a fiduciary responsibility to be careful with consumer data. This is no different than all of the other areas where we expect business to be conducted in an ethical manner.

The real challenge – and opportunity – is in marketing.

Marketing’s Role in Privacy

Much of the data requested to complete a transaction – online and offline – is not really necessary.

Why does anyone need my social security number? If I buy from a company that’s based in South Africa, they don’t ask for it.

Why does anyone need my address? If I use my PayPal account to buy something online, there is no need to validate with my address.

Why does anyone need to know how old I am or my annual income? They only want it for marketing purposes.

In fact, the root of the problem behind privacy issues – and the need for privacy statements – is marketing. (Yes, its me the marketer who just made that statement)

Since I first got involved in database marketing in the early 1990s, an important goal of marketing has been to capture more data about prospects and customers. The reason is simple. Smart marketers can better target their messages if they know more about you.

Over the past 20 years, the amount of data that has been collected about consumers is overwhelming. In fact, the irony is there is so much data that marketers can’t get to it all. Now they are exploring new Business Intelligence (BI) tools to help sort through and identify relevant data (but that’s another story).

So… it is marketers who can be blamed for the need to establish privacy policies.

Now, where do we go from here and what are the alternatives?

For marketers who respect the value of consumer privacy, it’s time to reverse roles. Acknowledge that consumers are the ones that are responsible for their own privacy. And stop asking for irrelevant data.

A better model going forward is to provide consumers with an easier and simpler way to share data they feel is relevant – when and where they choose.

In this new scenario, we just might find consumers will share a whole lot more than we ever expected, allowing marketers to provide better value in a more cost effective manner.

 

Which marketers are doing a better job with consumer privacy?

How can the value of privacy make a difference in your marketing?

 

Today’s value was selected from the “Pragmatism-Prudence” category, based on the e-book Developing Your Differentiating Values.

 

2 Comments

  1. Great post Rob. Interesting how you put the responsibility on the consumer – and rightly so. Now the consumer needs to know what their part is in all of this, and I think that is a bit foggy for most…

    • Thanks Peter. I agree this is foggy for many consumers. Education is becoming more important than ever. Maybe this is one reason blogging has become so popular.