How to Share Customer Data in Data Driven Marketing
There are a variety of reasons why you may consider sharing customer data with third parties. When deciding what data driven marketing information to share with whom, you need to be aware that consumers are getting more and more sensitive about having their personal data used for marketing purposes. You need to communicate clearly to your customers what you’re doing with their personal data.
For starters, you need to share your data with vendors that provide marketing services. The companies that provide address cleansing services, householding, demographic appends, and the mail houses that execute your campaigns all need access to your data. This is just standard operating procedure in database marketing.
In large companies — particularly companies that have a variety of different business units — customer data is often shared among these different subsidiaries. Because all these business units are technically part of the same company, this type of data sharing is not particularly problematic.
But be aware that customers don’t always recognize all of your brands as being part of the same company. For example, many consumers don’t realize that the Italian restaurant Carrabba’s and Outback Steakhouse are owned by the same company.
Companies may also decide to share data with corporate partners. An extremely common example is when a company partners with a bank to offer a cobranded credit card. Many of the airlines have such programs. Here data sharing is almost a necessity if the corporate relationship is to be successful.
Finally, companies sometimes choose to sell customer data. This does not include marketing service providers who aggregate data and sell it to marketers. They’re not providing data on their customers. This is about selling your customer lists to third parties. This is the sort of data sharing that consumers (and legislatures) are most sensitive about.
The decision to sell your customer data to third parties depends a great deal on your business model. Most companies decide not to do this. But a growing number of companies, particularly in the digital media arena, have a business model partly based on providing marketing services based on their customer data. If you do decide to sell customer data, stay up to date on legislation related to consumer privacy.