The ethics of database marketing: personalization and database marketing--if done correctly--can serve both the organization and the customer.

• Author: Cannon, Debbie A.
• Position: Business Matters

At the Core

This article:

* Examines the ethics of storing and using customer information

* Discusses privacy as an essential business strategy

Today, every information manager and technologist faces the challenge and added responsibility of safeguarding the corporation's greatest asset: customer trust.

Technology has advanced to a state where collection, enhancement, and aggregation of data are instantaneous. Corporations now have the technology to analyze the finest details about each customer. They can determine the most profitable clients and tailor their marketing messages accordingly. Information can be collaborated upon across the enterprise so the customer hears a single voice.

While this ability is a positive development for the corporation and means better services for the client, it also adds a level of anxiety if the aggregation is not performed correctly and appropriately. As personalization and data collection technologies become more advanced, the expectations of consumers are shifting rapidly. Customers' patience levels are getting shorter and shorter. Mistakes are not quickly forgiven.

Privacy and customer permission have become the cornerstone to customer trust. Most importantly, trust has become the cornerstone to a continuing relationship. A recent IMG Strategies study reported that "having basic permission and privacy policies (e.g., an opt-in policy) is becoming just the price of entry for marketers as opposed to the differentiator it used to be a year earlier."

Enter CRM

Companies want to "know" their customers; customer relationship management (CRM) is the key to that knowledge. IDC Research estimated that the worldwide market for CRM applications would more than double between 2000 and 2005, from $6.23 billion to $14.04 billion. CRM, however, is more than technology, software, and hardware. The real essence of CRM is in the acronym itself: customer relationship management--the relationship between the customer and those who manage the dialogue with the customer.

The database has become the strategic enabler for developing and maintaining this relationship. The role of database management as the vehicle for customer interaction has become a central strategic issue that reaches far beyond technology. Establishing and maintaining customer trust must be consistent across all customers' touch points. Each piece of information made available at the various interactions with the customer must be made available throughout...