Private affairs

Privacy has never been more in the public mind as a topic of conversation; as an issue that occupies the minds and attentions of regulators, legislators and the man in the street. There are a number of reasons for this:

• .         The events of 11 September have sharpened the focus worldwide on physical security and, therefore, information security.
• .         At the same time, technology has made it possible to gather more information on people than ever before, and governments and companies are responding accordingly.
• .         In a consistently tough economic market such as that in which we live right now, some companies are resorting to deep and detailed analysis of data to gain an insight into prospective and existing customers` activities, so as to be able to manage them more effectively.

These three waves have led to some clearly identifiable and well-publicised trends:

• .         The US government is leading the way in investing in new technologies that allow it to gather spectacular amounts of information about people, anywhere in the world, to contextualise this information, and then to process it with reasoning-type applications so as to be able to predict the potential for a second terrorist attack. Most people understand that this means they will sacrifice some privacy, but the lack of meaningful response from pressure groups would seem to be an indication that people accept the trade-off. The real big brother has found a place in our lives.
• .         Business and technology are using analysis tools - such as online analytical processing and data mining - to draw linkages between formerly disparate pieces of data. The South African Revenue Services, for instance, is connecting motor vehicle and home ownership statistics to tax paid to try and identify tax evaders. This has been very successful, adding many hundreds of millions to the tax coffers, and bringing to heel many people who thought they had escaped the net.
• .         The rapidly emerging and maturing discipline of customer relationship management (CRM) has driven thousands of companies to examine in fine detail the way they interact with their customer base. They have then turned to the data that represents their interactions and transactions, allied that with third-party data and begun to develop learning relationships and find correlations between formerly disconnected events.

There is some confusion about what data may be gathered, how it may be used, and how it must be disposed of. I thought, for the purposes of this Industry Insight, I would answer some of these questions.

One of the tenets of a person`s basic human rights is the right to privacy.

Doug Leather, CEO, Knowledge Factory, the customer insight services company in the Primedia group.

One of the tenets of a person`s basic human rights is the right to privacy. This right stems from a recognition of a person`s right to protection from unlawful infringement of his spatial privacy, and privacy in terms of freedom of choice and personal information.

However, privacy is not an absolute, it must be noted. Information that is freely or easily available falls within the public domain and therefore outside the ambit of private information, and it is not afforded any protection. Examples of such information are numbers in the telephone directory or records in public registries, such as the Deeds Office.

Customisation and personalisation reside at the heart of CRM strategies: the ability to offer different customers different products, levels of service and marketing messages based on their existing and projected lifetime value and a deep understanding of their needs. This brings us to a fundamental conundrum: how do you collect data about customers for the purposes of CRM when you could be violating people`s privacy in the process?

The answer, I believe, lies in the inversion of the process and the overall value equation. Gathering data with the fundamental rationale of selling this information is an unacceptable practice unless explicit permission has been given; gathering it so as to enhance value to customers is another issue entirely.

If customers experience enhanced and proactive service, improved communication, better-aligned offerings, and a more positive experience overall through sharing their data, how much more willing will they be to share information about themselves?

My guess is, a whole lot. And they would be increasingly happy to share information in what they consider to be a value-centric closed-loop relationship.

It`s certainly not going to be every company which responsibly gathers data; to imagine that would be analogous with believing in Cloud Cuckoo Land. But, for those companies which do understand the linkage between privacy and personalisation and demonstrably unlock value as a result of the information they collect, there is a bright opportunity to be maximised.