Skip to main content

How can data mining damage your company's integrity?

Paul Newman Archive

Today's companies use big data aggressively to improve their marketing initiatives, setting them apart from their competitors. In order to differentiate itself, each firm looks to target the right customers, in the right places, at the right times. Doing so requires obtaining more data.

Especially with e-commerce consumers, there are many ways of researching the market, and they vary in their effectiveness. For example, it's difficult for firms to maintain data quality when working with large volumes of data online. People who fill out forms on websites or mobile apps are prone to making mistakes - sometimes they make typographical errors, sometimes they mistakenly give outdated contact information. On occasion, they outright lie. If marketers are to make use of big data, they need to do more to ensure quality.

That's not the only issue, though. Another major concern is clouding the data picture - ethics.

Inc. Magazine recently raised the possibility that some companies could be crossing a line by collecting customer data in ethically questionable ways. Obtaining people's contact information without asking for their permission - for example, by scouring people's email accounts or rooting through their phone logs - may go too far.

Not always about the money
Obviously, a marketer's end goal when mining customer data is to increase profits. However, retail businesses should be wary about overemphasizing financial gain and losing sight of their moral compasses. A little balance is essential. Technology expert Derrick Harris explained this principle recently on GigaOM.

"However it's defined, the concept of big data ultimately boils down to money," Harris wrote. "Consumer companies, for example, want to improve marketing efforts by targeting specific products at their likely buyers. But is there a line we shouldn't cross when it comes to using analytics to squeeze every last dollar out of an operation?"

Indeed there is, and if companies want to improve their practices for gathering information, they should steer clear of invasive strategies. The truth is, these tactics aren't the most effective ones anyway. The best customers aren't the ones coerced into giving their business - they're the ones who actively choose to be engaged, volunteering their contact information by making purchases willfully.

Big data is always important in the marketing game. But by gathering information in the wrong ways, companies are hurting their reputations and their bottom lines.