Privacy vs. personalization: Beware of crossing ‘The creepy line’

By Sharon Paskowitz, Jonathan Chiriboga & David Coulson

Technology and the ability to capture and synthesize customer data have definitely blurred the line of privacy vs. personalization for brand marketers. Customer data can now be gathered and mined through new methods like never before. With the use of social media, mobile technology, sensors, geo-fencing and CRM, brands can deliver even more personalized marketing communications and offers to customers. But just because they can, does that mean they should?

The case for personalization

With more data comes greater personalization, which in-turn can allow for a greater customer experience. Look no further than Loblaws and American Express to see great examples of this in action.

Loblaw's PCPlus program seems to be the hottest CRM program these days, allowing the retailer to personalize incentives and rewards based on how each of its customers shop in-store. As Jean-Pierre Lacroix, President of Shikatani Lacroix states: "No longer are the flyer coupons blanketed to the mass market with few taking advantage of the offer. Mass marketing and communication are now being replaced by a curated incentive program that reminds you when your favourite peanut butter is running low and provides you with a coupon for a repeat purchase that shows up right on your smart phone so you don't have to remind yourself to bring that coupon to the store."

American Express 'Link, Like, Love' program is another great example of positive data usage being well received by customers. This next-generation rewards program integrated with Facebook for Amex card holders and offered personalized rewards based on Facebook Likes and check-ins. Customers were required to install the Link-Like-Love Facebook app to receive a personalized rewards dashboard. The caveat here is that customers needed to hand over to Amex information about what they've liked and where they've been. A case study on 'Link', Like, Love' from Beyond the Arc showed that American Express has grown user engagement and built brand advocates through the campaign.

At times, your privacy is definitely the cost of receiving great benefits and rewards with brands. The question is - are customers willing to pay up?

The case for privacy

The most well-known case of a data blunder was Target's "Baby-Gate". A couple of years ago, Target sent a teenage girl a coupon booklet filled with baby-related offers. Her father who saw the mailing was outraged that Target would send this to his daughter, unbeknownst to him that his daughter was actually pregnant and Target had figured this out through tracking her purchase behaviour. Target assigns every customer a Guest ID number tied to their credit card, name, or email address that becomes a bucket - it stores a history of everything they've bought and any demographic information that Target has collected from them or bought from other sources. Using this data they are able to predict certain things about you. Because of Baby-Gate, Target has re-examined the way it markets to its customers, but retailers tracking customers is something that is very real and will only evolve and continue to grow, especially with in-store beacon technology.

Target's intention was to provide a great customer experience to the teenage customer but what they didn't realize is that they crossed the "Creepy Line". The Creepy Line is a line where personalization goes too far and unfortunately for brands, every customer has a different place for it.

Our digital panel weighs in

A product of CMA's Branding & Strategic Planning Council, the following video is a Google Hangout we conducted involving a great mix of highly influential marketers to discuss privacy vs. personalization. Moderated by Jonathan Chiriboga, the panel consisted of Scott Stratten, John Michael Morgan and Matthew Vernhout.

Conclusion

There are many more examples that demonstrate privacy vs. personalization such as KLM Surprise, WestJet Christmas Miracle, Apple iBeacon, Disney and Google & Nest. Marketers need to be aware that there is a privacy continuum and that not all consumers will identify that line in the same place. For years, customers have been asking for targeted marketing that speaks to them but now that they have it, the cost of their privacy may seem to be too high. Brands should always allow for proper opt-in protocols but could it really be that privacy is just dead?

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Tags: Consumer Privacy, Privacy