The rules governing who can use the data and for what purpose may not be clear or restrictive enough to protect the intentions and interests of the subjects. Though CEO Donna Greer agrees, she knows that if things go well, it could mean easy money. Many users of these services do not realize that service providers are constantly monitoring users' online behavior and the information they store and communicate through the site, storing, compiling and analyzing the results, using it for the service's own purposes and sharing it with others. Archie had been invaluable in guiding the pilot project. This protection is necessary because of the ubiquity of the technology-driven and information-intensive environment. Maybe the company should formally position Smart Choice and other products and marketing programs developed using the Shop-Sense data as opt in, he wondered. All rights reserved. We tell customers the value proposition up front: Let us track your play at our properties, and we can help you enjoy the experience better with richer rewards and improved service. Ethical behavior starts with the CEO, but it clearly can’t be managed by just one person. A 2010 study by the Pew Research Center found that "More than half (57 percent) of adult Internet users say they have used a search engine to look up their name and see what information was available about them online, up from 47 percent who did so in 2006." “The big question is, Should we be charging more?” she mused to her husband. And many customers seem to be willing to live with it—perhaps with the unrealistic hope that they may reach the upper echelon and reap the ensuing benefits. Like most successful retail companies, our organization is customer focused; we’re always trying to see a store or an offer or a transaction through the customer’s eyes. Those details are stored in a central database. Wouldn’t we have to share that kind of information? Yet, as noted earlier, studies show that many employers will reject an otherwise acceptable candidate if the candidate has an arrest record. The idea, therefore, is that in taking advantage of the free services, the users in return agree to give the company access to their personal information, which it then uses to generate revenue that covers the cost of providing those services. “Exclusive rights to our data will give you information that your competitors won’t be able to match. Still, the deal wasn’t without risks: By selling the information to IFA, it might end up diluting or destroying valuable and hard-won customer relationships. Steve reminded Alan that IFA had no interest in revealing its relationship with the grocer to customers. I can’t tell people how to run their meetings or who should be at the table when the tougher, gray-area decisions need to be made, but whoever is there has to have those core principles and values in mind. All our programs require members to opt in if the data are going to be used in any way that would single a person out. Even if the services address transparency, the fact-checking problem is essentially un-fixable. This would address the “unintended use of data” problem; customers would understand exactly what was being done with their information. 2 Employers can also obtain credit records, medical and insurance records, and histories of workers' compensation claims. 17 Even when companies give assurances, as Google and Facebook currently do, that they do not sell their data to unaffiliated outsiders, it is still available to their advertising "partners," which gives the companies, not to mention the subjects of the data, even less control over where it goes and how it is used. There are plenty of examples of unethical … Instead, the message coming from the senior teams at both IFA and ShopSense is that any marketing opportunity is valid—as long as they can get away with it legally and customers don’t figure out what they’re doing. “Point taken,” Steve replied, although he knew that Alan was aware of how much positive attention those articles had garnered for the company. For instance, managers at any one of our properties can execute their own marketing lists and programs, but they can target only customers who have visited their properties. We want the CEO to look at the ROI number and feel we’ve met and … After all, her industry wasn’t exactly known for embracing radical change—even with proof in hand that change could work. We spend billions of … DynCorp Harms Locals. For sales and … And IFA was among the best in the industry at evaluating external sources of data (credit histories, demographic studies, analyses of socioeconomic status, and so on) to predict depression, back pain, and other expensive chronic conditions. 19, Defenders of the unconstrained collection, storage and use of users' personal data claim that in this networked world, where everyone is living online and putting their personal lives out there for everyone else to see, people no longer care about privacy, especially teenagers and young adults. 7. This is a "market failure," because consumers really have no power to negotiate and are therefore forced to accept whatever terms the companies set. Katherine N. Lemon (kay.lemon@bc.edu) is an associate professor of marketing at Boston College’s Carroll School of Management. The situation with social networks is even more restrictive. Some ride hard (young bikers), and some hardly ride (older, middle-class, midlife crisis riders). Occasionally, we’ll buy demographic data to fine-tune our marketing messages (to some customers, an offer of tickets to a live performance might be more interesting than a dining discount, for example). 21 MIT scholar Sherry Turkle, in a thorough and thoughtful study of how teenagers use and are affected by social networks, found that those she studied were very careful and intentional about how they crafted their online identities. 26 There have also been many cases of hospital employees and others looking up the computerized medical records of patients without authorization. 24, Another abuse of privacy is the publication or distribution of supposedly confidential information. The culture at Borders is such that the managers involved would have just assumed we wouldn’t do something like that. One spectacular example of this abuse is the British phone hacking scandal, where it was revealed that reporters at Rupert Murdoch's News of the World had been accessing the voice mails and phone records of hundreds of subjects, including members of the Royal Family, and using the very personal information thus gained in published stories. And what about the employees in each company who may be uncomfortable with what the companies are trying to pull off? She wheeled past the ShopSense Summer Fun displays. Indeed targeted advertising is by far the greatest source of revenue for their businesses and what makes it possible for them to provide their services to their users free of charge. Laura saw her opening; she wanted to get back to Jason’s point about competitive advantage. It has the potential to get specific information about products to those who are most likely to use it and to craft it in a way that is most appealing to them. However, most users are probably not aware that their transactions with Google leave a personally identifiable, permanent track record, much less agree to such a result. The internet has enabled both mass memorialization and massacres. He says it is essential that no one is harmed related to the use of data… If they want to dip into the overall customer base, they have to go through the central relationship-marketing group. In those one-on-one conversations, only Alan Atkins, the grocery chain’s chief operations officer, had raised any significant issues, and Steve had dealt patiently with each of them. Laura had read a profile of ShopSense in a business publication and learned that it was one of only a handful of retailers to conduct its analytics in-house. Specifically, she wondered, would it identify individual consumers as employees of particular companies? Those charged claimed this was routine practice among the British tabloids. What the companies are proposing here is very dangerous—especially in the world of retail, where loyalty is so hard to win. Using CRM Data Given that much of the customer data for CRM is sensitive, ethical companies ensure the data … “Oh, paper, please,” she replied. O.Z. 23 Their participation in social networks and other online activities should not be taken as permission to collect, use and broadcast their personal information. Even better, both firms would be engaging in trust-building—versus trust-eroding—activities with customers. One should not hire a convicted child molester as a day care worker. Cambridge Analytica’s use of Facebook data was a ‘grossly unethical experiment’ New, 45 comments The personal information of more than 50 million users was misused IFA had been looking at this relationship only in the context of individual insurance customers, Steve explained, not of group plans. “Imagine what that guy could do with an even larger data set,” O.Z. The data we’re getting are hugely important as a basis for serving customers more effectively (based on their purchase patterns) and as a source of competitive advantage. To be meaningful, consent must be informed and freely given. This can happen for a number of reasons. Before she could follow up on Jason’s comments, though, Geneva Hendrickson, IFA’s senior vice president for ethics and corporate responsibility, posed a blue-sky question to the group: “Take the fruit-and-nut stat Archie cited. What, then, should IFA and ShopSense do? Customer data come to us in many different ways. Laura was flying the next day to IFA’s headquarters in Cincinnati to meet with members of the senior team. Transparency is a critical component of any loyalty card program. Instead of ceding complete control to IFA, ShopSense could be somewhat selective and send offers to all, some, or none of its loyalty card members, depending on how relevant the grocer believed the insurance offer would be to a particular set of customers. Without new laws and new conversations about the ethical norms associated with social media, the disinformation, polarization, and resulting violence will continue. But we think the internal transactional data are much more important. “Trans fats and heart disease—no surprise there, I guess,” Archie said, using a laser pointer to direct the managers’ attention to a PowerPoint slide projected on the wall. Know the origins of your data and the rules surrounding it. Over time – if not right away – customers know when they are being “had.” It can range from slightly exaggerated claims to blatant lies – and everything in between. They’ll be able to get to know you intimately without your knowledge. Any of your personal data may become publicly available." Laura understood it might be a tough sell. 18 Most users have no awareness that their personal thoughts, interests and habits are so exposed. Opting out is not a serious option for many. “Of course, those customers realized later they might pay a higher premium when the company found out they routinely exceeded the speed limit—but that’s not a legal problem,” O.Z. For example, one generally sympathetic chronicler of Facebook has noted, "The reality is that nothing on Facebook is really confidential. This is … Customers’ information needs to be protected. In a pilot test, Laura bought ten years’ worth of data from the grocer and found some compelling correlations between purchases of unhealthy products and medical claims. 10 Moreover companies frequently change their privacy policies and practices without giving users adequate notice. But if companies are forced to choose between ethical behavior and maximizing shareholder value, the track record seems to … 25 In a less public but more extensive case, an investigation by the Internal Revenue Service found that hundreds of IRS employees were accessing information on tax returns without justification, in some cases out of curiosity about friends, neighbors, antagonists or celebrities, in other cases to check up on business associates, and in some cases to alter the tax returns. Like IFA, we ask our customers to share their personal and medical histories with us (the risky behaviors as well as the good habits) so we can acquaint them with programs and preventive services geared to their health status. Supermarkets, department stores and other retailers can now keep track of the items purchased by each customer, both online and in-store, and, if the customer … Criminal and legal proceedings Ethics CRM raises some disturbing ethical issues that fit into a grayer more... 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