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By Robert Gold and Andrew Z. Brown

Source: Marketing Magazine

Posted on May 21, 2002

      Without a doubt the Internet topic that has received the most airplay is that of security. However, the real reason for concern is far more personal and elusive. And, if we don't address it soon, we may not be around to worry about security. The core issue is ownership; ownership of our customers' identity.

      As marketers, our success depends on being able to tap into a customer's sense of identity. It's what we try to connect with in order to engage, entice and persuade them. But the evolving values, standards and expectations spurred on by the Net are causing customers to distance themselves from the information that we normally collect and interpret to better understand and reach them.

      Today, being secure means protecting privacy. For the most part, firms argue that keeping customer data secure is the basis for establishing competitive advantage. But, by doing so, firms find themselves investing more resources into adopting security technologies and hiring staff to implement and maintain them. As a result, we sometimes lose sight of the element that makes our marketing initiatives a grand success or a dismal failure: customer trust.

      As digital-savvy marketers and advisors, we need to ask our CEO or CIO an uncomfortable question: "To stay competitive, is it more important to build trust by investing in and promoting security technologies -- which few people really understand and which are temporary and still vulnerable -- or plan for and demonstrate the precautions we take in the event of a security breach?"

      The answer lies in the consistent findings from corporations, think-tanks and university studies: Building trust hinges on customers' belief that their most valuable asset, their privacy, is treated with respect. The problem is that for most firms, demonstrating respect for privacy is limited to confusing and legalistic privacy policies. If we really want to demonstrate our value to our customers and to our colleagues, we need to take a series of complex actions:
- present to the CEO/CIO evidence that our customers value privacy;
- prepare a balanced business case for investing in privacy procedures;
- draft internal procedures that operationalize the collection, use, storage, updating and distribution of clients' private information;
- work with the CIO and the human resources leader to develop and monitor training around privacy procedures;
- and hire a chief privacy officer.

      Tomorrow, privacy will evolve into anonymity. Our customers' sense of their own identity doesn't stop with just keeping certain information private. And, just as focusing on security masked part of the concern over identity, focusing on privacy can obscure the next evolution of this customer concern: the drive for anonymity.

      Online and off-line customers' expectations around what information is private, and what they have ownership over, is changing. Internet surveys suggest that people are beginning to see their private information as a commodity that has varying value, depending on who wants it and whether the price is right. These same customers are demanding something new that calls into question the whole idea of "one-to-one" marketing -- anonymity.

      Since the marketing potential of the Net was discovered, we have been working toward reaching our clients one at a time. However, save for a handful of companies with sophisticated data-mining capabilities (Amazon.com, for example), it isn't practical to collect, sort and interpret customer-specific data in real-time to instantly customize product offerings, pricings and messages. And now that customers are increasingly hesitant to provide private information unless their identity is stripped from it, we need to do something to ensure that our marketing activities can remain successful.

      We need to constantly demonstrate commitment to privacy so that our customers don't demand their identity be stripped from this information. We can do this by developing and distributing privacy-focused messages throughout company channels and materials, and by working with qualified third parties that can endorse our privacy commitment.

      Whatever reason we choose to build our firms' capacity and commitment to protecting customers' privacy, the bottom line is that by doing so, we will strengthen our bond with customers and ultimately make our marketing tasks easier and far more profitable.

      Robert Gold is the editor and chief researcher of E-CommerceALERT.com. He can be reached at rygold@BennettGold.ca

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