Student ID:464992

The Dark Side of Customer Analytics

Background
The grocery chain ShopSense considers about how to deal with data collected from customers to form
the partnership with a health insurance company IFA. ShopSense worries that privacy intrusion may spoil
customers’ trust.

Recommendation
I suggest three marketing strategies both externally and internally. First, increase customer autonomy
regarding data-sharing, to provide them more information and control over their data usage. Second,
display clear benefits that customers receive from their data inputs. In this way, customers are more
motivated to join in the data-sharing program and will consider ShopSense as a client-oriented service
business. Third, improve data-sharing process by setting limits to kinds of information shared with IFA and
regulating ShopSense in terms of storing and using data with updated privacy protection technology.

Basis for Recommendation

Increase Customer Autonomy. Letting customers opt in or out of the data-sharing builds trust based on
transparency, honesty, and openness. Sacrificing trust for short-term revenue is Myopia in marketing and
will eventually lead to serious issues. Therefore, empowering customers with the ability to authorize
ShopSense collecting their data, they can choose which portion to be shared, as they download mobile
apps, visit website, or sign-up for a loyalty card in store involves them into mutual-trust-building process.
Clear privacy statements on subscription page allow customers to understand exactly what will be done
with their information. This avoids “accidental misuse of data” situation. ShopSense will have more
customers authorizing data with well-reminded benefits of sharing data.

Present Clear Gains. Instead of telling how data-sharing is beneficial for ShopSense, the company should
tell customers what they can get through emails and social media. The general gain will be more
personalized service and better customer experience because of the collection of personal habits and
purchase history. Specific gains can be 5% cash rewards at the end of the year, 10% discount on “data-
sharing day” created for insiders that authorize data collection, and 30 dollars of coupons after 5 years of
sharing data. All reinforce the value proposition of ShopSense: focusing on improved service with practical
benefits and better knowledge of customers. By using advanced technology to protect customer
information, ShopSense is able to provide invisible while significant benefits.

Improve Data-storing-and-sharing system. A practice of technology-based Data Loss Prevention needs to

be implemented into workplace. With an advanced data-storing system that can process customer data
on its own, managing data will not be as time-consuming and tedious as it is now. In case, IFA knows
information they should not know, before signing contrasts with IFA, a professional category for customer
data with privacy scales calculated by technological programs should be establish so that IFA will only
know right portion of the database. This prevents leakage of data from the very beginning of the process
and simplified procedures that originally done manually.

Alternatives, Risks, and Assumptions

One alternative was to only use customer data within ShopSense. This was not recommended because it
limits opportunity for ShopSense to collaborate with other valuable firms and cut off considerable
financial income. One risk is that ShopSense may experience capital loss due to limiting shared information
to IFA and future business partner since the company now earn more money on data than actual products.
Another downside is high expense on technology for privacy protection system.