How to Track Your Consumers - Without Freaking Them Out
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How to Track Your Consumers - Without Freaking Them Out

February 19, 2014

Despite recent privacy breaches, companies will benefit from continuing to collect data in 2014, if they combine it with the right strategy to increase consumer loyalty.

The seemingly endless stream of privacy breaches has left consumers hesitant to share personal data with companies, for fear that their information could end up in the hands of malicious hackers…or the NSA.  This served as fuel for trendwatching.com’s prediction in their January issue of Trend Briefing that in 2014, companies will collect less data from their consumers, and instead offer “Great service, for everyone, all of the time.  No data required.”  But what is great service without data?  Our definition of great service has changed with great technology.

As a wannabe hipster music junkie, I’ve seen how Big Brother has helped me stay ahead of the curve.  Without collecting data on the songs I’ve listened to, how could Spotify populate my “Discover” tab and tell me how to get increasingly more obscure with the bands I listen to while remaining within the genres I’m most comfortable with?  “You like Van She and Kennedy?  Check out Penguin Prison,” it says.  Boom!  I’ve just graduated to orange belt hipster (like in Taekwondo, you get an orange belt, but are expected to wear it ironically).  AXS ticketing holds more sensitive information about me from tracking the tickets I’ve purchased, like my down-low love for Katy Perry.  But without them looking over my shoulder, how could AXS.com tell me first when to get in line for my tickets to Prismatic?  (This stays between us, right?)   This big pool of data is exactly what makes these companies good at what they do, and is becoming an increasingly big part of why they’re valuable to me.

The fact is, there are so many ways my name, address, age, and e-mail could get into the wrong hands, but I don’t necessarily put the responsibility for protecting those things in the hands of these companies.  I trust that they have good intentions when it comes to gathering my information because I can enjoy the benefits.

In the event of a data breach, it’s the companies that have gained the trust of their consumers in the first place that have the ability to bounce back.  People haven’t questioned their loyalty for Target, Neiman Marcus, or other recent outlets for large-scale theft—according to Forbes, most consumers just wanted to know when it was safe to continue shopping —but people should look more broadly at who’s responsible for this kind of security, and in what other ways they may be vulnerable.  First, while the law in most states requires companies to report the theft of personal information, there’s currently no federal or international standard for securing privacy, though privacy breaches often span multiple states or countries.  Second, companies may not be able to prevent privacy breaches even if they held themselves to higher security standards.  For example, the magnetic strip technology on U.S. credit cards is over two decades behind the times and is extremely vulnerable to hacking.  The future of privacy is less in the hands of individual companies, and more in the hands of lawmakers.

But that doesn’t let private business off the hook.  Companies have control over whether consumers see their tracking as an asset, or off-putting.  If they are data-driven in ways that frustrate their consumers, it won’t be worth consumers risking their privacy.  Strategy is the essential component to using data to gain consumer trust.  And a lot of it comes from listening to consumers and focusing on thought leadership.

Many people feel left in the dark when it comes to when and how information about them is being collected, and when and how it will be used.  Being transparent about and allowing consumers to opt-out of tracking if they wish would reduce consumer fears of misuse.

It was most obvious to me that my online behavior was being tracked when I did research for a skincare client, and was promptly flooded with ads for facials and products.  What if my client wanted to do a survey about toe fungus?  We’re talking fungal toes in my face.  It’s not just creepy, it’s frustrating because it disregards my desire to choose what I see, and this case, is unrepresentative of my actual interests.

Being data-driven in today’s world is essential, but turning data into real business advantage is the difference between ads that frustrate people and information that engages people.  Consumers need to know that brands are putting them in the driver’s seat, directing their own consumption of information, and being given value in exchange for their privacy.

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