// The TAG! Blog

Big Brother – Naughty or Nice?

Samuel Thompson - Friday, February 24, 2012

—( ‘James, I think your cover's blown!’, with thanks to Fiduz )—I’ve always been fascinated by how business use data and what they can discover about us. The benefits – for both the organisation and the customer – are unparalleled, making win-win situations more and more common. That said, how much knowledge is too much?

Adding Value

Knowing what people like is always a good thing, in business as in life. Smarter businesses bend over backwards to make sure their customers have a great time with them, ensuring brand loyalty and creating spokespeople for their brilliance.

Take loyalty schemes as an example. The simple loyalty scheme is something that we at TAG! like to think we know very well. Loyal customers are rewarded for spending their time and money with a business (or businesses) and everyone wins: the business gets the custom, the consumer gets treated favourably and leaves happy.

Add data collection into the mix, and there’s a whole new range of ways to make the customer feel good. If you know exactly what he or she likes – based on past purchases or general trends – it’s much easier to choose the right way to please them.

To continue the example, electronic loyalty schemes work in a similar way to standard loyalty cards, but with the added value supplied by data. By tracking how and where you shop, rewards and offers can be tailored to the consumer, or useful recommendations can be made for other products.

Worth the cost?

Data is an expensive and resource consuming game, but the potential benefits to a company which chooses to invest in setting up the required structures are huge.

Any means which encourages consumers to give more of their custom to a businesses – and especially a means which leaves the customer thankful to the business – leads to increased revenue.

An everyday example

MadeUpBusiness tracks John’s spends and discovers that, on the rare occasion when he pops in, he tends to buy a megaton of muffins. Adores the things, can’t get enough of them.

MadeUpBusiness then sends John 50%-off vouchers for muffins and, all of a sudden, they notice he comes more often and even starts to do his weekly shop with them (which obviously includes further muffin-y purchases).

MadeUpBusiness has, thanks to that one voucher, increased the revenue they’re getting from John by a factor of 30. And John absolutely loves them for it. All thanks to data (and muffins).

Great Power, Great Responsibility

The past few years have seen big advances in tracking techniques and applications, with the field becoming ever more complex and intelligent. As consumer behaviour becomes better understood (and more predictable) the ability of organisations to direct and guide customer actions increases.

Being able to affect consumer decisions has huge commercial value, but there is also a moral component that comes with these new-found abilities: to ensure that the customer is, or is perceived to be, benefitting equally (if not more) from the data being collected.

Amazon, for instance, are great at this: they use a personalised search and purchase history, as well as general consumer trends, to suggest further purchases which are relevant for the customer. The customer discovers new products that are likely to be of interest, while Amazon benefits from all the extra purchases made following these discoveries.

The Dark(ish) Side

Unfortunately adding value for the customer isn’t always the primary goal of data collection. The sheer amount that businesses know about us boggles the mind, and yet nothing forces them to use that knowledge in our best interest.

An interesting article from the New York Times traces the evolution of Target’s attempts to spot pregnant customers early in order to bombard them with relevant offers and win their loyalty for when the baby arrives.

Commercially, the justification for this is clear; having a child is a very disruptive experience, and the new parent is at their most susceptible to changing their shopping habits and abandoning former brand loyalties as they adapt to their new life.

Morally, there’s something... grubby... about this campaign. In the same way that advertising to kids is frowned upon, this seems to cross an invisible line. Nobody likes to be manipulated, but that’s just the power that businesses now have. Perhaps the real issue is whether we're aware of the lengths some businesses go to; to phrase it differently, nobody likes to feel like they're being manipulated.

Final Thought

Whatever we may think of how information about us is used, it’s usually our own fault. Most people give away data left, right and centre, usually without a second thought. How many people have a Tesco Club Card? Or use Facebook? Is it worth it? Do we even consider the terms of exchange? Should we?


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