The marketing department understood, for instance, that after three months of purchasing nothing but Way-Less bars and shakes, a shopper wasn’t susceptible to discounts on a rival brand of diet aids. ... Keep in mind that by not addressing ethical use of data … Donna couldn’t keep her mind off the IFA deal. The ShopSense data reflect food bought but not necessarily consumed, and individuals buy food at many stores, not just one. This is a serious attack on the autonomy and dignity of the individual subject. Peter urged Donna to drop the issue for a bit, as he scribbled his comments about the wine they’d just sampled on a rating sheet. The executives continued taking notes. “That’s because what we’re doing isn’t visible to our customers—or at least it wasn’t until your recent comments in the press,” Alan grumbled. They need room to experiment, explore and, inevitably, make mistakes. Indeed, that’s one kind, but the … Now she has to sell her company’s senior team on buying more information. The company should explore whether there are some customer data it should exclude from the transfer—information that could be perceived as exceedingly sensitive, such as pharmacy and alcohol purchases. Some companies have more leeway than others to sell or trade customer lists. Another concern for consumers is what I call “battered customer syndrome.” Market analytics allow companies to identify their best and worst customers and, consequently, to pay special attention to those deemed to be the most valuable. 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 use proprietary data-mining and analytical capabilities to help guide consumers through the health maze. Companies that can capitalize on the information they get from their customers hold an advantage over rivals. So the question for the CEOs of ShopSense and IFA is, Would customers feel comfortable with the data-sharing arrangement if they knew about it? Know the origins of your data and the rules surrounding it. Laura understood it might be a tough sell. The insurer wanted to buy a small sample of the grocer’s customer loyalty card data to determine its quality and reliability; IFA wanted to find out if the ShopSense information would be meaningful when stacked up against its own claims information. As a benefit to society?”. IFA could even put a positive spin on the creation of new insurance products based on the ShopSense data. Unethical Data When people think of unethical data, instances of knowingly tweaking information to make it show misleading conclusions often come to mind. Laura for years had been interested in the idea of looking beyond the traditional sources of customer data that insurers typically used to set their premiums and develop their products. 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. This is … Indeed, protecting data privacy is urgent and complex. Customers should have a transparent view of how our data is being used or sold, and the ability to manage the flow of their private information across massive, third-party analytical systems. 9 Also the conditions are often all-or-nothing. Harvard Business Publishing is an affiliate of Harvard Business School. If this very sensitive and personal information is handed over to an employer or appears in the newspapers, the patient has lost control over an important aspect of his or her life. It seems that everyone benefits. But we assure our customers up front that their information will be handled with the utmost respect. 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. What characterizes all of the situations in this section is that personal data is used for purposes other than those for which it was intended. It was several days after the review of the ShopSense pilot, and Jason was still weighing the risks and benefits of taking this business relationship to the next stage. Several managers at the table began talking over one another in an attempt to respond. 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