Thursday, May 8, 2008

Direct Marketing Dilema: Balancing Privacy and Targeting

This morning, two completely different articles from DM News caught my eye and got me thinking.

The first: CDD pushes FTC on privacy in mobile
"The Center for Digital Democracy (CDD) and the US Public Interest Research Group are taking on the Federal Trade Commission to address privacy issues in mobile marketing."
Apparently, the CDD wants the FTC to address privacy in mobile marketing, including regulating profiling and targeting.
"The new complaint addresses marketing practices from a technological level. It will examine Enpocket's Personalization Engine, a behavioral technology for the mobile device. It will also look at technologies from other companies which profile gender, age, language, income, education, country, state, ZIP/postal code, GPS coordinates, behaviors and in the context of voicemail and text messages."
When I take off my direct marketing hat and think about mobile marketing from a consumers' perspective, it can be a little frightening. Marketers can know where I am at all times. Essentially, they can track me. It does seem like an invasion of my privacy...

And, the second article: Keys to trigger-based e-mail marketing. The article discusses how marketers can take advantage of internal or external triggers to deliver the exact right message when that customer is ripe to purchase your product.
"Imagine having information regarding your customers' life-changing events, such as the purchase of a home or opening of a checking account, at your fingertips, and the dexterity to send out the right offer at precisely the right time.

Well, there's no need to imagine.

Trigger-based marketing programs are enabling e-mail marketers to communicate insightful offers in a timely fashion to both customers and prospects, yielding as much as a 400 percent improvement in response rates without costing millions of dollars."
Of course, this makes sense to us (and, in fact, we've implemented some highly effective trigger programs for our clients). But, many consumers may be creeped out thinking about the fact that their data is out there for marketers to exploit.

It's a real concern. As direct marketers, we really do need to balance consumer privacy issues with our own desires to produce effective, money-generating campaigns.

Yet, it can be done, and in my opinion, if it's done with transparency and if we communicate effectively with the customer or prospect, and ALWAYS keep their needs in mind, then we all win.

I like to use Amazon as an example. When they first started data mining and modeling to predict which products an individual would be most interested in, based on what they had purchased in the past, I remember people being irked by it. Why is this e-tailer keeping track of what I'm buying and where I'm browsing? Yet, when consumers started actually being interested in the Amazon-generated recommendations, and when we started counting on them, that's when perceptions changed.

Now, we expect our e-tailers to know about us and to treat us like the good customers we are. If they can offer suggestions, or discounts highly pertinent to us, so much the better. This builds loyalty and we keep spending our money there. The creep-factor of them knowing too much about us has been overwhelmed by the benefits we receive from them knowing a lot about us.

In my opinion, here's why it worked for Amazon:
  1. Amazon never tried to keep what they were doing a secret. They came right out and said something like: based on your past purchases, we thought you might also enjoy X and Y.
  2. The second reason this works for them: they did it right (their technology worked) and they brought real value to their customers.
Remember this each and every time you are mining customer data, or purchasing external data to mine. Ask yourself if your campaign is not only benefiting you as a marketer, but is your program benefiting your customer?

Bringing this back around to the original article about privacy concerns in the Mobile Marketing Industry--If people start receiving, for example, meaningful coupons on their cell phone, when they're shopping at that store, this might overwhelm the creep factor. But, let me tell you, those coupons better bring real value to the customer and the technology better be flawless. Or else, you're gonna have some mighty irritated customers. And, they'll be right there in your store, in your face, angry and ready to let someone have it. Yikes!

Thinking of the customer first is what is going to keep the creep-factor at bay.

1 comment:

Anonymous said...

Nice article. Things haven't moved quite that quickly yet in the UK.
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