Last Wednesday I made a post about non-profit arts organizations deserving to expect a little more of their customer relationship management (CRM) software. I briefly referenced the fact that collecting a lot of data on people could potentially become creepy and intrusive.

This drew the attention of Drew McManus who expounded upon the idea in a post of his own, saying:

I can’t remember the last time ethics were part of a discussion about CRM capabilities but it is never a bad idea to ask “just because we can use technology to do a thing, does it mean we should?” Consequently, it’s good to see these questions work their way into larger discussions about features and functionality.

This idea dovetailed well with a recent study that suggested marketers are misrepresenting the American’s public willingness to trade privacy for discounts.

“..a majority of Americans are resigned to giving up their data—and that is why many appear to be engaging in tradeoffs…Rather than feeling able to make choices, Americans believe it is futile to manage what companies can learn about them. Our study reveals that more than half do not want to lose control over their information but also believe this loss of control has already happened.

By misrepresenting the American people and championing the tradeoff argument, marketers give policymakers false justifications for allowing the collection and use of all kinds of consumer data often in ways that the public find objectionable.

Among their findings are that:

• 91% disagree (77% of them strongly) that “If companies give me a discount, it is a fair exchange for them to collect information about me without my knowing.”

• 71% disagree (53% of them strongly) that “It’s fair for an online or physical store to monitor what I’m doing online when I’m there, in exchange for letting me use the store’s wireless internet, or Wi-Fi, without charge.”

• 55% disagree (38% of them strongly) that “It’s okay if a store where I shop uses information it has about me to create a picture of me that improves the services they provide for me.”

The authors of the study note there is an inconsistency between these responses and actual behavior. Contrary to the third finding, when it comes to supermarket discount cards, 40% of those who don’t agree with the third statement participate in grocery store discount programs. The authors say this inconsistency arises from both the sense of resignation and a lack of understanding about what merchants and websites are legally allowed to do.

Among the examples they give are that 49% of people think a supermarket and 69% think a pharmacy needs your permission to sell your data. 65% think that if a website has a privacy policy, it means they won’t sell your data. All these are untrue.

“55% do not know it is legal for an online store to charge different people different prices at the same time of day.” (The same erroneous belief is held by 62% of people regarding off-line/physical stores.)

The study is interesting to read because it discusses how the research conducted by marketing and consulting firms finds people express a strong discomfort with the way personal data is handled. Observing the inconsistency between the expression of discomfort and action, the firms have chosen to interpret this as consciously choosing to trade privacy for benefits. While the study authors suggest that the irrational choices are due to resignation and ignorance, it is difficult to clearly discern the truth.

If nothing else, like teen promiscuity statistics, this trade off study helps to provide a sense that no, everyone else isn’t necessarily doing it.

I almost wish I had held off writing my post on CRM last week because a day later, I had a real life illustration of what the study was suggesting. I was presenting our board of directors some examples of the CRM capabilities available through the ticketing software services we had been considering. The examples contained a list of tickets and donations made by a hypothetical customer along with standard address information and notes about relationships with some people and employers.

Because the example was meant to illustrate the history of an avid attendee over the course of a number of years as they purchased tickets, merchandise and made donations, the bulk of the information was rather repetitive and mundane. For example, there were a lot of $2 donations for what was either a tacked on restoration fee or the guy rounding up his bill by donating to that fund.

The issue was, this made record of activity rather long and cover a few pages. People were concerned about amount of data that appeared was being collected on a person (all be much of it in $2 increments). It didn’t take long for someone to point out that far more data was being collected by Amazon, other retailers and websites than actually appeared on the sample profile I had provided. By then other people had already begun expressing resignation that this sort of thing was inescapable.

This reaction left me a little anxious that my hopes of making fundraising and marketing efforts more effective with better data collection and evaluation might get impeded right from the start. Later, thinking about it in the context of the trade-off study, I could see some benefit in providing some transparency and actually encouraging some oversight of the data usage by the board. That way they could better understand the process and provide assurances to the greater community that we were handling the information responsibly. Hopefully such assurances would result in increased confidence and support of the organization.