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How to put customer data to work — and get away with it

3 min read

Brands & Campaigns

This post was written by SmartBrief’s Doris Nhan.

Privacy policies are long and confusing and, more often than not, your customers aren’t reading them. So you shouldn’t be surprised when negative backlash follows after your customers find they’re being tracked via cell phone usage, Twitter activity or Facebook posts.

Data collection is key to tracking trends and optimizing products for a targeted audience. But when customers realize a marketing firm knows more about them than their grandmothers, they aren’t too happy.

And yet, such issues are less about privacy and more about responsible data usage, Jules Polonetsky, director of the Future of Privacy Forum, said at the Gov 2.0 Summit in Washington, D.C. When companies responsibly use data in a way that greatly benefits their customers, their products transform from an invasion of privacy into an invaluable service.

Polonetsky pointed to Facebook’s launch of the News Feed as a prime example. When Facebook first released the News Feed, users hated it. They decried the real-time feature as a major violation of their privacy. But once people got used to the new look, they began to love and appreciate the News Feed’s integral role in the Facebook experience.

Solve your privacy problems by turning user data into a key component of your product in a way that is also highly beneficial to your users, Polonetsky said. How did Facebook do this? They didn’t bother to hide the News Feed from their users. The data being aggregated into the News Feed was most likely being logged anyway, and instead of hiding, they turned it into a profitable, user-friendly feature.

Companies have long been hiding what kind of data they collected, Polonetsky said, out of fear that customers would react badly and opt out. But by being upfront and showing your customers how you are using the data — and how it can benefit them — it puts control back in the hands of customers, who will likely appreciate your honesty and innovation.

So when you’re marketing to your customers, remember the Facebook saga. Facebook’s ability to adapt to users’ needs has helped them become the most prominent social network out there. Keep lines of communication open, and always be willing to adapt to the needs of your customers. Make the value of collecting data obvious and meaningful to your customers, and they’ll appreciate you for it — and keep coming back for more.

Image credit, winterling, via iStockphoto