While various studies have shown that U.S. consumers are wary about making their personal data available, a new study finds that the reluctance depends on a key question. The question: How much is it worth to you?
That is the conclusion of a new book by Dimitri Maex, managing director of OgilvyOne New York, the direct marketing arm of ad agency Ogilvy & Mather. Entitled Sexy Little Numbers, the book contends that, according to its research, 72 percent of consumers simply want to have "fair value in exchange."
Maex said in a statement that this finding "indicates a fundamental shift in the data privacy debate -- and even in attitudes towards privacy -- and foreshadows opportunities for those companies that figure out the value consumers place on their personal information."
He adds that, before the digital age arrived, it was "fairly simple to target customers using direct mail and traditional customer relationship management" techniques. But today, he said, every customer move could be made transparent to the company -- a great opportunity for companies to determine how customer engagement can lead to revenue.
Customers, however, know this, and are looking for something in exchange. The book categorizes the types of value exchanges as rewards and monetary benefits, better service, or transparency and control in data usage.
Given those categories, it sees several emerging, distinct groups. The "Cash for Information" group is typically composed of young professionals, 94 percent of whom will share information in exchange for monetary benefits.
The "Privacy Cautious" consumer are primarily older individuals, and 41 percent of this group are willing to share information, such as a phone number, in exchange for better services. Among only the retired consumers in this group, that percentage rises to 50 percent.
The "Affluents" earn over $150,000, and, while 52 percent agreed that they would prefer a cash reward, 51 percent were also interested in receiving exclusive deals or discounts on products and services.
Maex' book describes some methods for determining the value of customers and potential customers, using such models as value spectrum and risk propensity, which can help determine how much a company is willing to offer for specific information.
Maex is head of OgilvyOne's Global Data Practice, which it said was rated by Forrester Research as first in the industry. He has implemented statistical methods for data analysis for GlaxoSmithKline, IBM, UPS , Unilever and others.
While OgilvyOne's research indicates that customers interfacing with CRM systems can be persuaded to exchange their personal information for the proper value, another recent study indicates that the context is also a key factor.
A report by the Pew Internet & American Life Project, released earlier this week, found that over half of mobile application users have uninstalled or avoided specific apps because of concerns about how personal information was collected or shared by the app.
This has implications for CRM, since there is a growing trend to place customer contact links inside applications, such as a bank application that allows the user to interact in real-time with the bank if a problem develops. A key question, unanswered at the moment, is whether the value exchange for personal data, beyond the minimum needed to get a question answered, rules in this case or whether app-wariness does.