Don’t be evil. That expression is famous as the unofficial motto for Google, which says that means – among other things – focusing on customers’ needs and delivering the best products and services possible.
That’s certainly an admirable aspiration for any business. But the massive amounts of customer data that businesses (and other organizations) are now able to collect, keep and analyze raise new questions about how such data are used.
Using business information to “focus on customers’ needs” and improve products and services certainly sounds like something most customers would want. Especially if they explicitly provided information to a business with the expectation of getting better – and, yes, smarter – products and services … that is, loyal shopper discounts, advance notice of sales they might be interested in, alerts when upgrades for past purchases become available, etc.
But there’s a murky area beyond that where using data becomes less about what’s good for the customer and more about what’s good for the business. Consider the well-publicized example of Target, whose increasingly savvy data analytics makes it possible to identify which shoppers are likely to be pregnant so the store can send them coupons and promotions for baby-related products. While it’s proved profitable for the retailer, the strategy has had some downsides. Some customers who received the promotions hadn’t told anyone – or didn’t know – they were expecting. (And one teen-aged customer’s dad wasn’t thrilled with the discovery.)
Then there’s Barclays Bank, which recently announced it will start selling data on its 13 million customers’ spending habits to other companies. It has emphasized that data will be sold only in “a numerical, anonymised and aggregated way.” But its letter to customers also noted the information “may include images of you or recordings of your voice” … which hardly sounds anonymous.
And what about the digital screen-equipped recycling bins in London that can grab identifying data from the smartphones of passersby? Renew, the company that installed them, promoted that feature not so much as a way to beam recycling-friendly messages to pedestrians, but to flash targeted advertising messages based on each person’s daily business habits. (After news of the “spy bins” got out, city officials issued a cease-and-desist order.)
The old wisdom about using customer data has long been, it’s OK as long as customers have opted in. The question now has become, opt in for what?
With the help of smartphones, RFID tags, computerized car systems and – one day, maybe – even “smart dust,” all of us are becoming walking, talking, commuting data streams. That information can be used intelligently. It can be used profitably. But those two uses aren’t always one and the same.
In a world where technological capabilities – and sheer volumes of data – are growing exponentially, what’s a business to do?
“(B)usinesses are under pressure to draft privacy policies, chief privacy officers are becoming essential members of many organizations, and companies are taking pro-active steps to avoid the potential reputation damage of a privacy mistake,” states ETH Zurich (the Swiss Federal Institute of Technology), which offered a course on e-privacy this spring.
Rand Hindi, founder of the predictive analytics company Snips, sees “no one answer,” but adds, “private data should always be opt-in.” Researchers at the Massachusetts Institute of Technology’s Media Lab advocate a “New Deal” on data they call openPDS, which defines data ownership as “the rights of possession, use, and disposal instead of a literal ownership.”
“Using data for purposes in addition to those originally identified can raise privacy concerns if those uses are inconsistent with the interests of the data subject,” the World Economic Forum notes in a report on “Unlocking the Value of Personal Data.” “However, as always, context matters.”
Without clearer answers currently available, that remains the best advice for businesses today weighing how to use customer data: context matters. And it’s the context of your customers’ best interests that should always matter most.
This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet. I’ve been compensated to contribute to this program, but the opinions expressed in this post are my own and don’t necessarily represent IBM’s positions, strategies or opinions.