Balancing the convenience and privacy trade-off

It’s a familiar story. After searching online for a flight, every travel advertisement in your social media feed points to that destination. As soon as you finish a novel on your Kindle, Amazon suggests your next read. Google Maps already knows where you’re going next because it checked your calendar. And sometimes it feels like Facebook can hear what you’re thinking.

For some people, this is the definition of creepy. For others, it’s convenient. So where do we draw the line?

According to the latest Australian Community Attitudes to Privacy survey, 69% of Australians are more concerned about their online privacy than they were five years ago. The question is, why?

The answer may lie in the way organisations now use data to personalise and micro-target in their marketing and communications campaigns. Sometimes, it feels genuine and helpful – such as a fast-track purchase path or the unexpected delight of being recognised as a loyal customer.

But at other times, it feels like we're being stalked by advertising.

Either way, consumers are now more aware that their private information is collected and analysed by many organisations, some of which they may not have consciously chosen to deal with. Web browsing history, social posts, credit card purchases, texts on messaging apps and their location can potentially be mined to fuel the big data machine.

In an age of artificial intelligence and interconnected devices, organisations are able to take customer data analytics to a whole new level. They can share these insights with other organisations to build an augmented picture of who their customers are, what they want and what they’re likely to do next.

The ATO is even data-mining social media to check if someone’s income declaration matches the lifestyle they’re portraying online. Machine learning allows it to recognise patterns and keywords, and flags a potential audit if there are large disparities.

The contract law conundrum

Packed with long-winded legalese, an organisation’s privacy policy offers little choice. If consumers want to transact or submit an application then they have to share their personal data with that device or app.

The problem is, not all consumers understand what information they may be sharing and how it’s being used. They often don’t really know what they’ve given away when they click ‘Agree’ on a web or app privacy policy.

The survey also found that 43% of consumers worry about how unknown organisations obtained their details when they receive unsolicited marketing from them. And even though Australians welcome the promise of better services or products, only 10% are comfortable with businesses sharing their personal data with other businesses.

Privacy policies are effectively a compliance tool, designed to protect the organisation’s right to collect information. And with organisations now recognising that privacy is more about trust than compliance, it may be time for them to rethink how they’re communicating those rights.

Trust begins with respect

For many Australian consumers, convenience alone isn’t enough for them to share their personal data – trust is also critical. And to build trust, organisations need to treat that personal data with respect.

This means applying three common sense principles:

  1. Convenience - This means offering value to the consumer. Will sharing their data save them time, help them make better decisions or improve their experience? If the answer is no, then it’s not a fair exchange.
  2. Consent – This means providing a clear, transparent guide to how customer data will be used and who it will be shared with, and then delivering on that promise.
  3. Control – This means providing choices over how customer data is used and only collecting the information necessary to complete the specific transaction.

Interestingly, both Facebook and Google rank poorly in US corporate trust indexes, yet Amazon is in the top 20. Data Governance Australia’s 2017 white paper Building consumer trust suggests this may be due to the ‘utility’ or customer value of what each platform provides - Amazon uses data to provide product recommendations while Google and Facebook use it to push advertising.

The white paper also suggests that ‘poor retargeting’ may the bigger problem rather than targeted advertising. If the algorithm hasn't caught up with the fact that a consumer isn’t interested or has already purchased the advertised product or service, they become frustrated or confused, which undermines the entire brand experience and erodes trust.

To test whether your organisation is striking the right balance between convenience and privacy, simply put yourself in your customers’ shoes. If it feels like an invasion of privacy, you might be crossing the creepy line.

To read more about privacy concerns in Australia, read our insight paper: How Australians feel about privacy.

 

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