Written by Laura Edwards. Published on Fresh Business Thinking.
How many times have we ticked a box of terms and conditions without actually reading the small print? I’m sure we can all hold our hands up to that, but do we really know what information and rights we are giving up?
Customer data has become a vital part of business as they use this data to gain insights into consumer behaviour to find ways to improve performance by understanding trends, and finding ways to target consumers better. However, we are now living in an information economy, where this valuable data has also become a money making machine, by companies selling consumer data to third parties for profit. So, should companies be allowed to sell customer data?
The importance of Data
With data driven marketing deemed to be the forefront of marketing strategies by using tactics such as targetted ads becoming the norm, many businesses believe this enhances the customer experience by offering ads that they know they will like. In an article from the Wall Street Journal, a number of opinions were displayed, including some believing that this is an acceptable approach as the tracking of personal history to present suggested products to make a profit is still in the consumer’s control as they still make the decision to purchase or not.
Due to the anonymity of consumer data, some think that it is not a problem to sell it. Nevertheless, not all data is anonymous. If the company has provided detailed personal consumer data, which according to the UK data protection act, includes a full name, address, National Insurance number. Or alternatively a combination of information, such as their last name, age, gender, employment, postcode, marital status, nationality, education, disabilities, income or assets. Both types are generally seen as violation of privacy when given to third parties. Over the years, many have criticised these actions and it has become a question of business ethics about our rights to personal information.
If people are able to be identified, whether this be by email or name, then it could be argued that they have a right to their individual privacy and should therefore be in control of who has access to their data. This is what the European Union have proposed and will be now be regulating businesses use of consumer data under the new legislation The General Data Protection Regulation (GDPR), meaning that an individual customer is entitled to know how your data is being handled and will make companies accountable.
A reward for personal data?
In recent years, consumers have realised that their data is being used and sold to third parties, which overall can potentially cause harm to businesses, as it damages trust. Therefore, some believe that as they know that their data is of value, consumers should be paid for their data.
Data Breach risks
With personal data being put in the hands of people unknown to us, this also gives us more uncertainty as to who has our information and are they susceptible to security breaches. In recent years there are businesses coming under fire for issues of data being leaked and hacked, it remains questionable for consumers to be comfortable with their data being passed around and sold on to many businesses.
We know that the changes in the law in 2018 from GDPR will change how businesses use customer.
Written by Laura Edwards.