How to Keep Your Customer Informed with Data Driven Marketing - dummies

How to Keep Your Customer Informed with Data Driven Marketing

By David Semmelroth

Respecting your customer’s privacy in data driven marketing is about more than just data security. It’s also about transparency. You need to communicate with your customer about how you collect and secure their data. The customer also needs to understand how you’re using their data. Many companies choose to sell or share their data with corporate partners. However you do this, needs to be transparent to the customer as well.

All this information needs to be well documented. What you need is a privacy policy. This policy should be developed in conjunction with your legal department and senior management. It should be clearly communicated within your organization to ensure that it is followed. It should also be made easily available to your customers. Your website should contain a Privacy Policy link that allows users to review the complete policy.

Privacy policies are standard practice in virtually all medium to large companies. A simple web search can provide you with a host of examples that are specific to your industry. You probably get a privacy policy update letter from some company or other a couple of times a month.

Privacy policies are often not optional, but legally required. There are several industries whose data and data usage are governed by federal legislation. And new legislation continues to be proposed. It is critical that you understand your industry’s legal environment.

How to identify differences by industry

One industry that has come under broad scrutiny by the government is the financial services industry. The Gramm-Leach-Bliley Act puts significant restrictions on the sharing and use of customer data by banks and other companies involved in consumer finance.

Another industry that is highly regulated is the health care industry. The Health Insurance Portability and Accountability Act is a federal law governing data related to a person’s health care. Data on children is highly sensitive as well. There are laws on the books and in the pipeline governing the gathering, storage, and sharing of information about young people.

In addition to federal legislation, some state governments have passed laws regarding the use of consumer data. Also, if your company does business outside the United States you’ll need to understand the legal environments there as well. The United States is actually one of the least restrictive — anybody thinking about using their database for international marketing needs first to consult counsel and understand the regulations.

How to identify differences by channel

In addition to being industry specific, both existing and proposed legislation regarding privacy differs by marketing channel. You need to give your customers the opportunity to request that you not market to them. Your legal obligations regarding these opt-outs differ according to how you’re communicating. Different legislation applies to telemarketing than to e-mail, for example.

But your obligations can also vary according to how data is collected. The widespread use of mobile devices has gotten the attention of federal and state legislatures throughout the U.S. The privacy issues related to mobile devices stem primarily from the real-time location data available from those devices.

One concern revolves around transparency. Many people simply don’t realize what information they’re broadcasting from their mobile devices. And because location is an essential part of many mobile apps, these broadcasts are often automatically turned on. Another concern relates to the privacy and safety of children.

The Children’s Online Privacy Protection Act (COPPA) was first passed in the late 1990s. This law aims to limit the data that websites collect from children under 13 years old. This law is actively enforced by the FTC and has resulted in a long list of companies that have been fined for breaching it.

More legislation is brewing around mobile device data. More and more children are carrying smartphones everywhere they go. Legislation is being considered in Washington to address concerns specifically related to mobile devices and location data. These concerns are legitimate. And the need to protect children is one of the few things Americans all agree on.

Develop a relationship with the lawyer in your company who is responsible for privacy compliance. But also stay abreast of what is happening in your industry with regard to privacy legislation and especially how other companies are responding to it. You want to comply with relevant legislation, but you also don’t want to unduly limit your ability to use your customer data.

Privacy compliance is not the most exciting aspect of your job as a database marketer. But it is necessary. As time goes on, signs point to it becoming a larger, not smaller, part of your responsibilities. Privacy is also not the only aspect of your job that’s guided by legislation. There is also legislation governing your need to allow customers to opt out of hearing from you.