Data is under the spotlight yet again as the ICO ramps up its investigation into Cambridge Analytica, the UK firm accused of using personal information gathered on Facebook to influence the US election. Cue inflammatory headlines regarding consumer privacy by every major news outlet.
The ICO has been investigating political campaigning and the use of political data for many months and the allegations against Facebook and Cambridge Analytica are just one strand of that work. So if this plays out the same way as the ICO’s charity investigation that took place last year, then it looks like many political consultancies will be issued fines for unfair data profiling.
This should serve as a huge warning for all organisations that hold or enhance prospect or customer data. There will be those that say the ICO is on a witch-hunt, and be that as it may, it doesn’t change anything. The bottom line is that data can’t be used in any way without permission unless you are willing to risk large fines and massive reputational damage. Charities have the wounds to prove it.
The key, moving forward, is to embrace the new way, not hanker after the old. What went before has to become a distant memory of days gone by. Like the video recorder or old-skool oil-and-flavour laden crisps.
The problem with scandals such as these is the knock-on affect it has on the use of data. Many organisations will bury their heads in the sand preferring to do nothing than risk being investigated.
However, this approach has just one outcome – unhappy customers. Most sectors can’t afford unhappy customers, but there is one industry that certainly can’t.
With daily retail Chapter 11 filings, the retail sector is already operating on a knife edge and its customer relationships are one of the things that separates the successes from the failures.
Toys ‘R’ Us, Maplin and Claire’s Accessories are not renowned for their CRM (although given their niche audiences they should have been), whereas John Lewis, Amazon, Specsavers and Superdrug all regularly receive awards and commendations for their customer relationships and as far as I’m aware none of these stalwarts are anywhere near the administrator’s office.
Data is not a bad thing. It’s a very, very good thing. It helps organisations better understand and serve their customers, in a mutually beneficial way. The company becomes more profitable and the customer has a better experience and often saves money in the long term. But it has got to be used transparently.
Research study after research study proves that the consumer is not an idiot, they understand the value of their data and what they get in return. It is therefore crucial for brands to pop the question – ask their permission you’ll be surprised at how many say yes.
Dave Gurney is managing director of Alchemetrics