By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She is currently writing a book about textile artisans.
The Wall Street Journal reported on new efforts companies are making to hoover up your personal data, in the wake of privacy laws enacted in California and Europe, combined with Apple’s new policy on how its users can be tracked, plus a similar pending change by Google (see WSJ, Big Tech Privacy Moves Spur Companies to Amass Customer Data).
Data gathering has long been a priority, as companies believe it allows them to target ads more effectively. These government and big Tech changes are prodding companies to step up their efforts to get you to hand over your data “voluntarily”. Per the WSJ:
So brands are deploying an array of tactics to persuade users to surrender data to the brand itself—loyalty programs, sweepstakes, newsletters, quizzes, polls and QR codes, those pixelated black-and-white squares that have become ubiquitous during the pandemic.
Avocados From Mexico, a nonprofit marketing organization that represents avocado growers and packers, is encouraging people to submit grocery receipts to earn points exchangeable for avocado-themed sportswear.
It is also conducting a contest for the chance to win a truck. To enter, consumers scan QR codes on in-store displays and enter their name, birthday, email and phone number.
“We have a limited window to figure this out, and everybody’s scrambling” to do so, said Ivonne Kinser, vice president of marketing for the avocado group. It has managed to capture roughly 50 million device IDs—the numbers associated with mobile devices—and is working to link them to names and email addresses. The group plans to use the customer information for ad targeting and to make its ads more relevant to its customers.
Amassing data is costly, requiring both complex software and expertise in data science. Moreover, the databases companies are building are paltry, compared to those already assembled by the usual big Tech suspects. This means that in the near-term at least, companies will still be forced to advertise with Amazon, Facebook, and Google, so as to avail themselves of their superiors databases.
The WSJ provided a peek into how companies convince you to hand over your data:
Molson has conducted more than 300 data-collection efforts this year, including sweepstakes and contests at bars around the country. Many customers signing up in the contests agree to let the brewer store their information and use it for marketing purposes.
“You could think it’s a bad thing, like, we’re trying to access people’s information, but people actually have no problem sharing that information because they’re getting a benefit out of it as well,” said Sofia Colucci, global vice president of marketing for the Miller family of brands.
The Milwaukee-based brewer currently has more than a million customer profiles and says it is hoping to increase that to at least 13 million by 2025.
Now, I admit that I occasionally supply some of my own data when companies ask. And I note that unless one were to make all purchases in cash, eschewing all digital and online transactions, one must accept that data is being generated that someone will seek to exploit. Online, I succumb to company requests for data when I want to to get access to discounts and advance notice of promotions by some specialty websites I frequent. But, there’s nothing that says the data I supply has to be complete – I usually skip right over including my birthdate and this thus far hasn’t prevented from registering. Nor accurate, for that matter – at least in the way a company might prefer. I don’t always supply my correct name, but register as one of my many avatars. If my experience is close to the norm, that means that companies are collecting corrupted, inaccurate data. I’m not sure how much that matters, for advertising purposes, however.
The little snippets aren’t what companies seek anyway. I’m not a habitual smartphone user. And for a long time, I relied on a dumbphone only, for calls and occasional short texts. Now that the pandemic has stranded me in the U.S., I’ve acquired a basic prepaid smartphone. But I use it for calls only. No apps. No emails. Don’t text me. I don’t read them and I certainly don’t reply. I do engage in on-line transactions, but as before, any of those go through my laptop only. So no smatrtphone is assembling a digital record of the stores I visit in person or the transactions I engage in.
I learned from the WSK that my experience is far from the norm:
Companies aren’t after just a few personal details. Many aim to log most of the interactions they have with customers, to flesh out what is called a “golden record.”
Such a high-quality customer record might include dozens, even hundreds, of data points, including the store locations people visit, the items they typically buy, how much they spend and what they do on the company’s website.
This kind of information doesn’t just help with online-ad targeting but also lets brands personalize other parts of their marketing, from the offers they send people to which products are displayed to customers online.
Lest you think I’m sounding a bit smug and out of touch, I’m well aware I haven’t escaped the clutches of company marketers entirely, as I’m a member of many loyalty programs, largely travel-related. And in fact, I must make an unavoidable trip to LA later this month, and I’ll use airmiles to do so, and stay at a hotel using loyalty program benefits. I’ve belonged to such programs from a time long before the internet and online transactions became such a big phenomenon. Seeing the lengths companies are now going to slice and dice my data and manipulate me, has made me more aware of theses goings on – as well as determined not to share details about myself. Why should I help companies elude data protection laws? Per the WSJ;
Companies in retail, travel and hospitality are well positioned to harvest data because they deal directly with consumers. Many such companies have long invested in loyalty programs that offer perks such as fare discounts or hotel-room upgrades, and have already built customer databases for personalizing marketing.
Dining chain Chili’s Grill & Bar has about nine million active loyalty members, and its records contain about 50 different bits of information, including how many times a person ordered certain foods such as burgers, fajitas, ribs or a kids meal, the company said. Chili’s also has some emails, phone numbers and purchase history for 50 million customers who aren’t active loyalty members, which it can use for ad targeting.
In an example of how the data help to tailor messages, ads sent to someone who frequently orders appetizers might say, “Come in for a free app,” said Michael Breed, senior vice president of marketing at Chili’s, which is owned by Brinker International Inc. He credits the chain’s stash of customer data for helping avoid major fallout from the policy change Apple made.
Some of these efforts are just plain creepy:
Some retailers that saw a surge in online sales early in the pandemic supercharged their data collection. “It allowed companies in a very natural way to know a lot more about you,” said Chris Chapo, former vice president of advanced analytics for Amperity, a marketing technology firm.
In 2020, Dick’s Sporting Goods Inc. added 8.5 million new loyalty-program members, or athletes, as it calls them. The company has more than 20 million loyalty members.
Dick’s loyalty-member profiles can include up to 325 data points and customer traits. These include the purchases members make, whether they have children, what draws their attention on the website, how much they have spent with Dick’s over 12 months and what is their “lifetime value”—an estimate of how much they will eventually spend with the company.
The Bottom Line
I don’t know about you, but being reduced to a ‘lifetime value’ of what we might spend with a company seems to devalue our worth as consumers, leading companies to skimp on supplying quality products and responsive customer service to all customers.