The New York Times published a very interesting and detailed article a couple weeks back on how companies are collecting data on you and what they end up doing with it. I had a few discussions with friends after reading this and understandably (and often depending on the person’s profession) the conversations ranged from distress that our privacy is being completely undermined to admiration at finding ways to make use of all this information customers are “providing”.

I fancy myself a bit of a contradiction on this issue: personally I tend to err on the side of caution about what information I share about myself in both the virtual and physical world, but professionally I work in an industry that benefits greatly from gleaning the minute details when building databases. Not only does having specific information about potential prospects and customers have the ability to lead to improved sales, but it also means our customers are able to market smarter – so, in theory, end consumers are only getting messages most relevant to them and not a lot of non-applicable ”junk”.

So, my suggestions as a dichotomy of pro and con data collection are these:

1. Be diligent. Spend time continually up-keeping your database – old data is bad data. Trying to sell local garbage services to a prospect that has long-since moved from the area you are targeting is not beneficial to you or them.
2. Be creative. Start with the things you know – contact information, buying habits from your company, information on their company or job. Then consider other less obvious factors that might make an impact (this is where knowing what your ideal customers look like becomes so important!). Take time to build this information into your database – either by appending information from outside databases or building it organically.
3. Be strategic. Making sense of data isn’t usually a quick and easy process. It requires researching and hypothesizing and testing to validate claims.  When talking data mining and targeting, it’s almost universal that people will understand the concept when using shopping on Amazon as an example. Think of the work built into their back-end that allows them to make the recommendations they do. Find those connections between your customers and make relevant recommendations.
4. Be useful. We have a local grocer who notifies my husband of great deals on bacon when he enters the store – because he knows that my husband is going to stock up on all the bacon he can fit in his cart. And he realizes that the indirect statement of “I know you and I know what you like and I want to share this with you because I value you and our relationship” goes a long way. Make good use of the data you collect – use it to benefit both your customer and your company.
5. Be transparent. If you are collecting information when someone is on your website, say so. If you are collecting information when they leave your website, say so. If you are surveying your customers and plan to use the information for future marketing, say so. Sneaky never feels good, regardless of your intent.

I think Seth Godin said it well in a recent post, and I paraphrase: the concern isn’t so much privacy – we gave that up long ago – but the concern is being surprised.

Whatever you decide to do with your data, try it out wearing the hat of the opposition – a little duality can go a long way in the success of using your data.