Wednesday, April 24, 2013

Why the Feds Can't Connect the Dots--and What it Means to Marketers

Today's New York Times relates one of many finger-pointing episodes sure to follow in the wake of the Boston Marathon bombings, an article detailing accusations by U.S. Senators that Federal law enforcement agencies inability to share data led at least indirectly to the incident.

Georgia Republican Saxby Chambliss summed up his frustration by saying

“There have been some stone walls and stovepipes reconstructed that were probably unintentional.  We’re going to continue to look at whether or not all the information was adequately shared and given to all the law enforcement agencies. If it wasn’t, we’ve got to fix that.”

So happens, I've spent some time with one of the "stone walls" (curious choice of words for a Southerner, I reckon) that Congress very intentionally enacted to keep data bottled up in Federal agencies.  The Privacy Act of 1974 offers several lessons to marketers on its creation, use and misuse.

First, a little history lesson.  I learned a little bit about the Act recently when I helped an ad agency client of mine win some CRM business from a large Federal agency.  The year of the act tells you much of what you need to know about it.  The act came from a Democratic-led Congress coming to terms with Executive Branch power in the wake of the Watergate scandal.  In the broadest terms, Congress wanted to prevent the Executive Branch from using Federal agencies as an auxiliary spy service on American citizens.

In essence, it strictly limits what the Federal government and its agencies can do with the individual data that they collect.  With exceptions for law enforcement and other uses, the Privacy Act ensures that Federal agencies can only use data for the specific purposes under which they collected them.  So, for instance, the Internal Revenue Service couldn't ask the Customs Service for a list of every citizen who traveled back and forth to the Cayman Islands to look for tax cheats.

While Senator Chambliss and his colleague are (rightfully, I think) reconsidering how Federal agencies share data through a national security lens, I think it also provides an object lesson for marketers who have a set of information in marketing databases.  While our lives don't depend on marketing data, often our livelihoods do, so it pays to learn what we can!

  1. Understand why you collect data.  If marketers consider a shortage of big data scientists a problem now, can you imagine what the federales must have thought in 1974?  Early big data agencies such as Social Security or the Census had little clue as to future uses of individual-level data.  As marketers, we know better now.  Thus, before collecting new data, think about potential marketing implications, such as aggregate information gathering ("45% of our customers prefer milk chocolate to dark chocolate"), segmentation or individual-level communications targeting.
  2. Create a privacy policy that aligns with intended use of data.  Long ago in my career as a CRM strategist, I learned to double-check the privacy policy posted on a client's website before making recommendations on what to do with marketing data.  If a privacy policy does not explicitly state that the marketer will use the data for the purpose(s) outlined in #1 before, make the proper amendments and inform customers as law requires.
  3. Ask permission and offer benefits.  Often, a marketer changes a privacy policy but has a number of customers who signed up under the old policy.  Legally (in the US, at least), the marketer only needs to make attempts to notify the customer and then he or she can have at it.  As an added precaution, I recommend that marketers ask for express permission, even using something as minimal as a permission pass email, that specifies how this change in policy will benefit the customer.  For instance, explain that using the data will result in more relevant offers, faster customer service or better feedback on products and services.
I don't mean to belittle the Senators' efforts to make America safer by the prudent use of data, nor do I expect to use the Marathon tragedy as linkbait.  However, the power and effectiveness of data have only begun to enter the consciousness of the non-Mathlete world.  Any lesson we can learn about data can make us smarter.  

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