Technology is creating concerns for ethics and data analytics. New data collection technology provides organizations with many opportunities for leveraging big data. These technologies help to both streamline operations and better serve customers.
However, as companies go further with what they can do with data, they also must remain mindful of ethical rules. Ethics help prevent companies from crossing a line when it comes to collecting, extracting and analyzing data.
Most consumers understand how data collection can lead to intrusive behavior. Perhaps the best-known example happens while searching on the Internet. If someone looks at a Toyota Camry ad on a car-buying website, they then will find Camry advertisements popping up on many sites they later visit (unless they delete cookies from their search engine).
Some might find this helpful. Others might find it annoying. It’s not always helpful to get accosted with advertisements for something researched hours before.
This type of marketing is a balancing act between attempting to serve the consumer and not overstepping privacy boundaries. It’s one that marketers, customer satisfaction experts and data analysts face daily.
There’s no un-ringing the bell with big data. While some companies still practice mass marketing, many are now using data to identify and target potential customers. This data allows marketers to offer products and services the consumer finds interesting and useful.
Yet another well-known example comes from Netflix and Amazon. Both specialize in digital streaming services. Anyone using either service will find their home page filled with recommended movies based on what they previously viewed.
The same applies to a person’s online activity. Businesses now use data to identify and target likely customers. Personalization marketing involves tailoring advertisements and delivering them based on data collected from products in which consumers have shown interest. This can also include brands they have interacted with online.
Predictive analytics are used to project future consumer needs based on these patterns. Ethics governs the type of data allowed for these purposes.
Ethics vs. Laws
Laws governing the protection of consumer data vary by state. California’s Online Privacy Protection Act is one of the strongest in the US, requiring companies to clearly post privacy policies. Similar laws exist in Europe. European laws limit the amount of time data can be stored and forbid the transfer of data to businesses outside Europe.
Companies can work toward earning customer loyalty by fashioning ethical policies of their own, regardless of local laws.
Doing so requires considerations in many areas. They include the following.
It’s vital that those in the C-suites start the move toward data analytics ethics. That begins with strong internal policies about when, where and how data is collected. This might include placing restrictions on data collected in customer-facing departments from being shared with those in other areas. Creating and enforcing strong internal rules to govern collection and sharing of data within an organization, encourages business leaders to create strong ethical rules for dealing with those outside the organization.
- Who collects and sees data
- What type of data is collected, and when
- How the data will be used
- How long data will be kept
- Strict parameters on the exact type of data to be collected
Obviously, once created these standards must be strictly adhered to, no matter what laws have been enacted by governments. It’s also important to provide consumers with easy access to the details of the policy.
The Ask-First Policy
Many businesses have adapted the policy of clearly asking people for permission to collect data. This typically happens through a large pop-up on your screen. That way, the consumer has a chance to say “no” and keep Camry advertisements off their screen.
A company that does well in this area is Google. It not only gives users a chance to not allow certain data from being collected, but also provides detailed information on how the data will be used. Getting a customer’s consent is key to developing loyalty with potential clients and customers.
As technology evolves, ethics policies governing data will need to evolve, as well. Technology has brought consumers and businesses closer together than ever before. It’s up to each business to be honest and forthright about how they plan to use consumer data.
Keeping these in mind also establishes trust with consumers that eventually improves the bottom line.