Do you know who has your data?

Do you know who has your data?

Whilst reading the latest Database Marketing magazine I came across a piece:  O2’s parent company – Telefonica – is planning to sell your mobile information to the highest bidder (or maybe any bidder).  Is this something to be concerned about as a consumer or is this the start of you thinking about who else has data on you and what are they doing with it?

o2 Logo

“Telefonica Digital has announced the creation of Telefonica Dyanmic Insights, a new global business unit that will create value from big data by selling analytical insights into the company’s customers to private companies and public sector organisations around the world.  it intends to develop a range of products using different data sets, including machine to machine data and anonymised and aggregated mobile network data”

Now my first reaction was “how dare they” thinking of how much a 24 month contract costs and the cost of the add-ons and penalties for exceeding data limits.  Are they using the ‘value added’ I am ‘giving’ the mobile phone company to reduce my bills, increase shareholder value or investment in a new 4G network?  Honestly? Well probably the last two but, my bills just seem to go up.

I am reminded of a meeting I attended a number of years ago at the Association of Online Publishers, when the subject of using customers’ data came up.  I wouldn’t say a furore ensued but, there was certainly animated discussions.  One of the panel members (sorry I cannot remember this name) stood up and said:

 

“Ok, how many of you are concered about data protection and how your data is used by companies?”

( [a] large proportion of the audience put up their hand)

“Right, how many of you have a Tesco ClubCard?”

(more hands went up)

“and you’re concerned about data protection?”

 

Perhaps consumers don’t look at the data protection issues when:

i) it’s disguised as a loyalty scheme

ii) you’re being “rewarded” for participation.

So I ask you, how many of you have a store card?  It may be underwritten by organisations like MBNA or Barclaycard but, who’s to say that your transactions aren’t being analysed to identify marketable patterns? Information that could be sold to external parties, partners or simply used to cross sell other products.  Your personal information is still being used, your behaviour analysed and your customer profile segmented left right and center.  In the business this is called Customer Analytics.

I remember seeing a presentation by Cindy Krum (@suzzicks) a number of years ago.  For those that don’t know Cindy she is the world’s foremost expert in mobile marketing (and she’s even written a book – Mobile Marketing).  At the conference she was talking about augmented reality (and there have been similar reports on the Gadget Show).

Augmented reality (AR) is a live, direct or indirect, view of a physical, real-world environment whose elements are augmented by computer-generated sensory input such as sound, video, graphics or GPS data. It is related to a more general concept called mediated reality, in which a view of reality is modified (possibly even diminished rather than augmented) by a computer. As a result, the technology functions by enhancing one’s current perception of reality.  By contrast, virtual reality replaces the real world with a simulated one. Augmentation is conventionally in real-time and in semantic context with environmental elements, such as sports scores on TV during a match. With the help of advanced AR technology (e.g. adding computer vision and object recognition) the information about the surrounding real world of the user becomes interactive and digitally manipulable. Artificial information about the environment and its objects can be overlaid on the real world.

Wikipedia

Now let’s fast forward a few years.  You are walking down the street and you pass “Holland & Barrett”.  You’re smart phone uses GPS and recognises that you’re near the shop.

This information is then shared with a marketing engine (or your bank) and they analyse your transactions for the last three months and they discovered you’ve bought a 30 day supply of cod-liver oil 29 days ago.

It realises that you’re running low and this triggers a text message or a message on a digital billboard appears offering you a unique deal.  The beginnings of true 1-2-1 marketing.

 

This gives a great opportunity to increase sales, help with personalisation and customer centricity.  The technology already exists and perhaps this step taken by Telefonica is the next step in the path to one-to-one marketing.

Intrusion or business being helpful in the busy 21st century?

Similarly, other channels could be used and tied together.  Isn’t this why Tesco insists you use your ClubCard when shopping their their online store?  It is to tie your online behaviour with your offline behaviour and the reward to you? Discount Vouchers? Benefit to Tesco – massive benefits from cross sales and customer insight.

Recently (see links below)   an article has been published on BBC News about how the Office of Fair Trading (OFT) is investigating the use of customer data to target them for different prices.  Now this seems to be a smack in the face (well a second one when you count the crazy cookie law).

“It is important we understand what control shoppers have over their profile and whether firms are using shoppers’ profiles to charge different prices for goods or services,” [Clive Maxwell – CEO of OFT] said.

The OFT wants to understand more about individual pricing but, it looks more and more like they want to know everything that the businesses hold on customers and why?  Is this going to affect aggregated figures like o2 are planning to sell on?  How is this going to affect loyalty cards (which are also reported, by the Telegraph,) to be in the cross hairs of the OFT.  Is this going to be the end of customer segmentation because everyone should be treated fairly (and perhaps ‘the same’)?

“We know that businesses use information about individual consumers for marketing purposes. This has some important potential benefits to consumers and firms. But the ways in which data is collected and used is evolving rapidly.”

Clive Maxwell, CEO of OFT

 If we bring in the insurance market.  As of December 2012 it is now illegal to give pricing differentials based on gender.  So the age-old saying that women are safer drivers isn’t being taken into account.  However, recent press on young drivers cause 25% of accidents on the road and as a result they already face having a ‘black box’ put in the car to monitor driving behaviours (and breaking any policy stipulations).  But now it seems they will be banned from taking passengers that immediate family (see related links for full article). Now where is this fair – it appears that we’re persecuting an age range.  Now isn’t that wrong/illegal?

Data is fast becoming the life blood of all businesses whether you realise it or not (or whether you like it or not).  It enables you to segment customers, identify cross sales / repeat business opportunities.  Move your marketing strategy for a more 1-2-1 model and even price individually (something the trade industry has had for a long long time).  Hard work?  Privacy Issues?  In my opinion definitely.  My solution is be honest with your customers and educate them.  If that fails (or is proven to be difficult) bribe them .. vouchers anyone?

Related Links

Database Marketing Magazine – strongly recommended regular read

BBC News – Online shopping technology faces OFT focus

Huffington Post – Do you know what information Online Shops have on you?

Loyalty Cards set to be part of the OFT probe into personal pricing – Telegraph (via Yahoo)

Young drivers – “could face passenger restrictions”. BBC News

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