Big Data, big danger?
It’s all businesses appear to be talking about at the moment — big data — but there are very real ‘big data dangers’ that can cause damage to brands and their bottom lines. And deservedly so in some cases…
They’re both buzzwords that have been carved into marketing’s psyche over the past few years.
And when deployed properly, they can be highly effective, delivering the right message to the right customer at the right time.
Despite all the good news, there is an emerging trend that is beginning to cast a negative light on these two powerhouses of marketing — where automation replaces common sense or becomes intrusive and, in some cases, downright offensive to customers. Here are some extreme examples which make an important point…
“I hid my pregnancy from the internet.”
What? One woman attempted to keep her pregnancy a secret from the internet to avoid becoming a gold mine for companies, who would undoubtedly send her advertisements for baby products.
How? We’ve all heard about the angry father who discovered that his daughter was pregnant courtesy of a Target mail out offer, and not from his offspring. The situation arose because of the company’s comprehensive customer ‘ID’ operations — its ability to build up frighteningly accurate profiles of its consumers based on their store visits and purchases.
This kind of aggressive profiling was highlighted by Janet Vertesi, an associate professor of sociology at Princeton and her experiment to keep her pregnancy off the internet — by avoiding cookies and data collection. To ensure she didn’t fall foul of data profiling, she announced her pregnancy by telephone and personal email online only, while banning it from being mentioned on social media.
Vertesi also refused to use her credit card for purchases and if she needed to buy something online, she would only use Amazon gift cards purchased with cash. Any delivery being made arrived at a personal locker, not her home.
The lesson? Vertesi succeeded in fending off intrusive offers but her experiment highlights that privacy is becoming a big issue for customers — companies need to be more careful about how they use it. It’s more crucial than ever that brands offer comprehensive opt-out options to their customers.
“In big data, we trust.”
What? US retailer JCPenney’s CEO Ron Johnson learned the hard way about big data dangers by making substantial changes to his stores in 2012, all based on the in-depth analysis of its data. Despite intending to boost JCPenney’s bottom line the company saw its profits drop from $17 billion to $12.9 billion.
How? An over-reliance on big data that resulted in JCPenney cutting off its nose to spite its face — by focusing on pricing models and reinventing the store for a new market, Johnson failed to realize the impact it would have on his original customer base of bargain hunters. As Rick Snyder, senior analyst at financial services firm Maxim Group, so succinctly put it: “this is what happens when you fire your customers”.
The lesson? Big data can be useful, but not when treated in isolation — just ask Johnson, who was shown the door after only 17 months in the role. His replacement? The CEO who he had replaced. Over a year on, analysts believe the company is starting to turn the corner — but serious questions still remain about JC Penney’s ability to refinance in 2015. This story is far from over.
“Dear [insert cause of death here]”
What? New Yorker Mike Seay received a mailout from OfficeMax in January this year. Nothing unusual — apart from the fact that it was addressed to ‘Mike Seay, Daughter Killed In Car Crash’. And OfficeMax was right — Seay had tragically lost his 13-year-old daughter in a car crash the previous year. He and his wife were so upset by the mailout that he contacted the media to query how a company gained access to information about his family. And how on earth it ended up on an office supplies promo.
How? The company claimed that the mistake occurred because of a mailout list it had bought from a supplier. But how its system knew about the gender of Seay’s child and how she died still remains a mystery.
The lesson? Organic list building is a must — it is the best way to create a list that generates good marketing return. If you must purchase a list, ensure it’s from a reputable supplier, and do your own cleansing work on it before using it. Constantly monitor your CRM system to ensure that its ‘automation’ processes doesn’t get ahead of you.
– Consider just how important big data really is to your operation. What and how much do you actually need to know about your customers? Or are you accruing data simply for the sake of it?
– Do you have the right skill sets to analyze your data? Or are you suffering from an issue that Darian Shirazi, founder of Radius Intelligence, calls “haystacks without needles”?
– Always consider the customer first and foremost — do they want to feel that you are watching their every move? Is that the best way to conduct business and build a long term relationship with them?
– Remember your place in people’s lives whether they are B2C or B2B. You’re a company selling them goods, not the NSA.