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Customer data privacy looms large in social business

Using social media to gather data on customers has been rife with opportunities -- and risks -- for customer data privacy.

Social media-driven business, mobility and other new practices in marketing have augmented the risks for customer...

data privacy and created new challenges for customer data management.

As companies opt to aggregate customer information from these new sources -- often without consumers’ knowledge and sometimes without their explicit consent -- new issues are emerging. Companies now have to be responsible stewards of this data, and consumers need to consider which kinds of information they are willing to share about themselves.

These are just some of the issues likely to emerge at the Social Shake-Up, which takes place in Atlanta, Ga., Sept. 16 to Sept. 17. 

SearchCRM talked with David Schweidel, associate professor of marketing and co-director of Emory Marketing Analytics Center, about the increasing importance of customer data management and the implications for social, mobile and other sources of data. SearchContentManagement also discussed the increasing importance of social business to marketing efforts.

There have been dramatic data breaches of customer information. Are companies adequately protecting this data? And, is the line being drawn appropriately between openness and privacy?

David Schweidel: The question every company should ask is, if they want to collect different kinds of data, "What am I going to do with it? How will it make my business better?" There is [the] cost of collection process, data management [and] the security. There is a chance of significant data breaches. If we collect sensitive data, there is a big cost that comes along with it.

From the consumer side, the question is, "What do you define as sensitive information?" We did a survey with Bain [and Company]. We wondered whether consumers' willingness to share their data is the same for all organizations, or are they more willing to share with some compared with others? We're in the process of doing the data analysis; we surveyed more than 1,000 people. Consumers were least willing to share their data with government organizations [more than 60%], following that were financial service providers, following that were telecommunication providers [60% each]. They were more willing to share information with retailers [40% expressed reservations]. It's not a constant. It may have something to do with how they think the information is being used.

Is that a fair agreement for consumers?

Schweidel: I think it is. It is an exchange that consumers and businesses are willingly entering into. Every time you shop at Amazon, that information will deliver more relevant recommendations next time. Netflix has said that something like 80% of viewing consumption on the site is driven by the recommendation engine.

All of that is fueled by consumers sharing their data. The challenge is openness and transparency. There is no gun to consumers' heads to participate. You don't have to receive promotions, but if you do, this is the data we need. And consumers should be empowered to opt out.

Are we going to have to pay more to protect data?

Schweidel: We do have to address that issue. If we were to put policies like this in place, we need to ask, "What are the broader implications of this? Are some people shut out of these offers?"

Or are they invited in, but only by sacrificing their privacy to get a better deal?

Schweidel: Is it a sacrifice or a data exchange we're entering into? That is some of the challenge we have to contend with as businesses come to rely more on that consumer data exhaust.

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Essential Guide

CRM leadership: Buying, managing and running a system

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very good article.
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