BALTIMORE -- When it comes to customer privacy, marketers have to do more than just obey the law, says Gartner analyst Adam Sarner. They have to avoid the "creepiness factor."
Speaking Monday at the Gartner CRM Summit, Sarner described how he was once contacted by a mortgage company that seemed to be almost flaunting the information it had gathered about him.
"[The letter] said: 'Dear Mr. Sarner, we have used your publicly available records and understand that you pay X amount for your house at X percent,'" Sarner said. "Creepy, right? 'We were digging around in your data, and this is all the stuff that we know about you.' It kind of creeps you out. ... You have to understand that [people] are a little touchy about this."
A better technique, Sarner said, would have been for the company to use the information it had found in a more subtle way -- by simply contacting him with a competitive offer.
The story was one of several examples of poor techniques that Sarner offered during a session titled "The Price of Privacy in CRM Initiatives."
@1423 Of course, a company that mismanages a privacy issue can do more than irritate a customer -- it can get into serious legal trouble. Sarner offered a lengthy list of privacy regulations, plus several examples of companies that have paid hefty fines for violating them.
And, he said, laws will get tougher. In fact, Sarner predicted that, within the next two years, a U.S. company will make a blunder with customer data and become the "Enron of privacy" -- possibly sparking a flurry of new privacy legislation.
Companies that want to avoid trouble in this area should start by learning the U.S. privacy laws, as well as the rules in other countries, Sarner said. Companies should also take care to secure customers' data and make sure it's protected from "rogue attacks" by employees.
Another idea, one that seemed to strike a chord with attendees, was Sarner's strong suggestion that marketers use opt-in techniques, not opt-out. "You can do anything you want with customer data as long as, one, you ask them; two, they say it's OK," Sarner said. "There is nothing before any sort of government entity that is going to be more restrictive than that Golden Rule."
With that in mind, Sarner offered a few tips for increasing the likelihood that customers will opt in to marketing campaigns:
- Be specific. Make sure that customers know exactly what activities they're opting in to, he said. Follow the same rules with opt-out: "'Do you want to opt out of this stuff, or do you want to opt out of this?' Give them a choice. Otherwise, they're going to pick the fastest thing that they can do."
- Let customers manage their own profiles. Sarner noted that companies spend a great deal of time and money on analytics software that predicts what customers are more likely to buy. That's one way to do it, he said, "or you can ask them. 'Do you want to talk about baby clothes, or do you like MP3 players?' They have a very good idea of the sort of things they want."
- Let customers specify how they want to be contacted. Do they want to be reached by e-mail or phone? How often? "Let them tell you what they want," he said. "Make them a participant in what you're doing to them."
- Offer incentives. Sarner described a movie theater that once offered popcorn to people who provided their e-mail addresses. "Sometimes you've got to buy them off," he said. "That's the reality."
- Encourage online communities. The Internet is the biggest customer communication channel in existence, Sarner noted, and most companies aren't doing enough to tap it. One company that's set a good example, he said, is TiVo Inc. Sarner noted the existence of an online community of TiVo users, who chat about the value of TiVo, as well as what the company could be doing better. TiVo, wisely, is using that information.
Interviewed after the session, some attendees said the opt-in discussion was especially useful.
Kate Fiacchino, CRM manager for bath- and kitchen-hardware supplier Kohler Co., said that she's looking for ways to be as customer-friendly as possible with her company's e-newsletter.
Already, the e-newsletter only goes to people who request it. But, after listening to Sarner's remarks, Fiacchino said that she wants to work harder on anticipating when customers may want to opt out, perhaps by asking them to specify up front how long they'll want to receive the mailing. She noted that customers generally want the e-newsletter only while they're working on home-improvement projects.
"We'd love it if they wanted it forever," she said. "But we want to make it easy for them to say, 'Oh, my project's done.'"