Watch your step
So apart from the expense, what's the catch? You could land your company in deep water with privacy advocates.
Privacy watchdog groups are keeping a close watch on data mining technology and are ready to pounce on any perceived abuses. In the absence of regulations or even guidelines, it is up to companies to find a balance between spooking customers with Big Brother technologies and winning them with promises of convenience.
"Bribe them!" is the simple solution Rogers offers--and many businesses seem to agree. Many Web sites promise the chance to win holidays, prizes and more--the catch?--sign up and include your personal information. So if you want a stab at a trip to Bali, you'll have to include your e-mail address, sometimes even your home address--it's no wonder consumers are growing wary.
"Our privacy laws and principles are based on the concept of a record that is retrievable only by a person's name. New technologies may mean that all those principles have to be reexamined," says Robert Ellis Smith, publisher of Privacy Journal. "Every privacy policy on the Net begins with the line, 'We're sensitive.' . . That's hollow. Just being sensitive is not enough anymore."
Even if companies don't heed Smith and his privacy watchdog cohorts, the stock market certainly will. Witness DoubleClick's plunge after its privacy flap and Intel's dive after a threatened boycott over the tracking capability of its Pentium III chip. Don't expect your data mining software to make it any easier either. Consumers will always be a little wary of companies collecting data, says Onyx's Camilleri, but if the information is being used properly, customers will benefit. "You have to ask for consumers' permission, and then offer them products and services they're interested in, rather than nuisance mail," says Camilleri.
The international privacy group Junkbusters offers some guidelines for fair information practices that sites can adopt as part of their privacy policy. First, give people access to information about themselves and allow them to modify it if they wish, says Junkbusters founder Jason Catlett, who has a Ph.D. in computer science. Second, use the information only for the purposes you specify. Third, keep the data secure from unauthorised use. Catlett and others stress the importance of moving to an "opt in" model, in which consumers must consent to having their data mined--a practice that may one day become law. Despite the controversies, though, your business' success depends upon data mining. In the immediate future, data mining will allow businesses to become more integrated and more effective. No longer will loyal customers be stuck in long queues when they try and make a large purchase over the phone. Businesses will also be more accountable than ever. Different departments need no longer argue over where a business plan went wrong. Businesses will know which products sell better and why, they'll know which advertising campaigns are making the most sales and which marketing campaigns are getting the most response.
As a consequence, companies will know how to better spend their money. In fact, there's no telling what sort of benefits--to businesses and consumers--business intelligence software will produce in the future. Even academics have made predictions about a customer-information rich future. Here's what we can look forward to: a real person will pop up on your screen and say, "Can I help you figure out what is the best product for you?" They're not going to have to say, "What can I interest you in today?" That person will have available to them your immediate track record. They'll already have a scope, a context, of what you're interested in or what you're trying to find out about.
