Using customer data responsibly
The proliferation of online services and mobile devices has led to a dramatic increase in the amount of data accumulated on the users of such devices and services. Website and campaign administrators can track the duration of our visits, the videos we watch, the search terms we use, and much more. We also leave tracks when we move around with mobile devices in our pockets. Who owns this data? Who gets to utilize it, how, and at what price?
Customer and location data has become highly sought-after material that interests not only companies that market products and services, but also the authorities, the police, and those in positions of power who wish to control their citizens. However, the protection of privacy and personal data is a basic right that is safeguarded by privacy and consumer protection legislation. Legislation is also being amended at international level: the EU’s new data protection regulation was approved in 2015 and it will enter into force in member states in 2018 at the earliest. The aim is to create a harmonized and comprehensive framework for data protection in the European Union and to increase trust in online services.
The regulation will replace the Data Protection Directive issued in 1995. The regulation includes provisions covering areas such as the principles governing the processing of personal data, legal compliance in processing, and the processing of sensitive information.
In addition to legislation, there are also industry-level rules aimed at establishing acceptable and responsible practices, such as those drafted by the Finnish Direct Marketing Association. According to Jesse Sandqvist, Marketing Strategy Director at Seed Digital Media, responsible companies conduct themselves appropriately even without rules and legislation. Technological progress is much faster than legislative progress, which highlights the role of self-regulation and responsibility on the behalf of companies and organizations that collect data.
“The unwritten rule is that data must not be used inappropriately,” Sandqvist says. “Of course, there are always some who look for quick wins and try to take the easy way out. However, today’s customers are highly aware of these matters, and consumers are alert, which means that the market quickly exposes unethical activity. At Seed, we build long-term relationships with customers on a foundation of trust and loyalty. In our business, you only get to lose a customer’s trust once.”
Seed’s loyalty marketing activities are based on the customer’s consent. It is an exchange: by consenting to the use of data, the end customer receives targeted messages and a more personalized service.
“Collecting customer data online is easy, but the interesting question is how to do it in the brick-and-mortar store,” Sandqvist says. “The focus is on customer data and information concerning the customer, with systems based on location data being a new addition. These systems can recognize when a certain mobile device enters the store in its user’s pocket, for example. The merchant can then influence the customer’s service experience during the visit, for instance, by communicating personalized offers if the customer has consented to this.”
Sandqvist believes in individual freedom and basic rights. Going forward, customers will be able to increasingly control the types of messages and advertisements they receive. Consent can also be temporary: when you are buying a new car, you might consent to having car-related messages sent to you. When you have made the purchase, you can revoke your consent.
Seed became part of Nordic Morning just over a year ago. Nordic Morning places a high priority on responsibility issues and ethical guidelines, but this did not force Seed to reassess its operating methods.
“We have been in this industry for some time, and responsibility has always been an integral part of our culture,” Sandqvist says. “We have a deep-seated desire to take a positive view of everyone and to respect others. Being in the business of trust and loyalty, it is natural that we take good care of our personnel, partners, customers’, and our customers’ customers. Nevertheless, it is good to have certain principles written down when you are recruiting people or entering a period of growth as an organization.”
Text: Sari Kuvaja, Corporate Responsibility Advisor