In April of this year Steve Barnett and I published two papers in the Cutter IT Journal on Resonance Marketing, the art and science of developing product offerings that resonate with customers’ wants and needs, cravings and longings. Resonance products represent such ideal fit with customers’ individual preferences that each becomes sort of a mini-monopoly, and the importance of price and price-based competition is greatly reduced.
David Lineman published a thoughtful response, “Securing the Long Tail,” in which he reminded readers that resonance should not be achieved by collecting and misusing data on individuals” shopping history or other transactional logs. He listed four points, recently stressed by the European Union in a policy on data collection and use:
How do you strike the balance between privacy and functionality? I argue that almost everything is okay, as long as you ask permission. In summary, be honest. Be transparent.
What this means in detail is that companies must do four key things when marketing to informed consumers:
- Request permission to collect data, and tell the consumer what and why you are collecting it.
- Only collect the data you need, and nothing more.
- Take steps to protect the data.
- Tell the customer exactly how you are going to do steps 1-3.
These four ideas are simplified summaries of the Organization for Economic Cooperation and Development (OECD) privacy principles. The OECD has codified a number of best practices for managing customer privacy, organized around eight key privacy principles. The principles are the foundation for many privacy laws. And they are very much common sense.
In my response, to the Lineman article, which you can read in its entirety, I point out that the four points are not new. Indeed, I first encountered them in the data usage policy of a major hotel chain over twenty years ago. But they are more important than ever before because information technology makes it easier than ever to collect, analyze, use, and abuse information. Rather than producing resonance, abuse of information will cause customers great discomfort, and can indeed result in their leaving for other service providers with policies that seem less intrusive, less invasive, or simply put, less offensive. If it is to be effective, resonance must not be based upon surveillance.
Not all resonance is based on matching products to individuals’ history. Products are often designed to fill gaps in the marketplace, identifying and responding to unserved and underserved segments of the market. And increasingly, once designed, these products are not pushed out at consumers based on information acquired by observing and knowing ever more about the consumers’ history of actions. Rather, products are found and pulled in by consumers, based on each consumer’s profound sense of informedness empowered by the information endowment provided by the net. Although there is a common perception that resonance means customization, and customization is based on invasion of the customer’s privacy, neither needs to be the case. Resonance does not need to be based on surveillance.