Big Data and Customer Privacy

As social media, streaming and subscription services grow, so does big data.

Big data is the driving force behind providing full customer definition, segmentation, and personalization services, allowing businesses to spot business trends, determine the quality of research, provide target advertising, and a multitude of other functions. There is, however, a very fine line that businesses must be wary of never overstepping that may compromise a customer’s privacy and their trust in the business.

The use of big data must be very delicately considered. On one hand, the accumulation of big data creates problem-solving measures for scientists, medics, humanitarians, and so on. It can provide information on when, where, and why people go hungry in third world countries, the mapping of diseases and treatments, locating organ donors, helping people survive natural disasters, track epidemics, and can generally help and inspire others to do good.

The other hand barely needs an explanation; nightmare scenarios of data breaches, hacking, and identity theft are becoming more and more common. And then there’s less devastating but equally disturbing incidents of corporations perhaps taking personal information a bit too far. Such was the case when a dad found out his daughter was pregnant when Target sent his household coupons for diapers.

So how do companies ride that fine line between significant data and the invasion of privacy?

A recent study of over 8,000 consumers and their opinions on data privacy to loyalty programs may help create a guideline on how to successfully utilize big data. Some of the foremost facts the study found included:

• 86 percent of consumers would click a “do not track” button if it were available
• 30 percent would pay a 5 percent surcharge for guarantees that their information would not be captured
• However, customers would possibly be willing to share their information if there was an even exchange; 70 percent said they would voluntarily share personal data in exchange for a 5 percent discount
• 62 percent of the “Silent Generation” (those aged 68 and older) would keep their data private and not receive a discount
• Compared to 40 percent of Millennials who said the same
• 74 percent said they were okay with companies offering personalized coupons based on their purchase history
• But only 13 percent think it’s acceptable for any company to buy or sell personal data to be able to personalize coupons

Taking all this into account, there are three ways that companies can avoid a serious breach of privacy.

Increase engagement

Big data can over-excite companies, and they may try to do too much at once with it. Instead, they should utilize it at just the right moments. Consumers want a more open marketplace where they can bypass targeted marketing strategies, and instead of being inundated with a broad number of products, they would rather be the ones to initiate brand interactions when it comes to unique needs. In other words, instead of infiltrating a consumer’s everyday life to advertise and promote their product, consumers would prefer that brands focus their marketing efforts during a consumer’s active shopping.

Don’t let big data control your brand

Having data on a consumer does not always mean having to act on that data, especially if such data is invasive or sensitive to the consumer (such as the death of a family member, or the recent loss of a job.) Using such data may, at best, result in the loss of a customer, and at worst, shed a very public, very negative light on the business for taking advantage of such data. Marketers should use human empathy and judgment to determine what data should be used, not algorithms and machine logic.

Data utilized not just by the brand

Consumers are big fans of being able to personalize their interactions with brands, so why should the business be the only one able to utilize the information? Using big data, consumers can change privacy settings, personalize the navigation of the business’s website or app, determine which products and services are more appropriate to their needs over a period of time, and so on. By doing so, businesses allow consumers to serve themselves rather than using the data simply for their own profit.

With so many major businesses straining to deal with privacy issues nowadays, having a plan in place to keep your customers’ data from being used for all the wrong reasons is essential. No one wants his or her private information sifted through to ultimately be used for another entity’s advantage – keeping that human perspective will allow brands to make better decisions on just how far their marketing arm will reach.