The dark side of Customer Analytics!
Posted by Ajay Kelkar on Thu, Oct 07, 2010
An Insurance company finds interesting patterns in the loyalty card data that it bought from a grocery chain-the link between condom sales & HIV related insurance claims.
How can both the Grocery & Insurance Company leverage their data responsibly! Imagine if your health insurance company started studying your grocery purchase patterns & decided to price your insurance basis “How healthy your purchases from the grocery store are?”
Yes the customer database has value & a company can grow the value of its database in multiple ways: grow the database, mine it & monetize it! Marketers can & will use the data that they collect from customers in many ways, that seem attractive but they need to be cautious that this does not damage customer relationships. So analytics, if used irresponsibly, can actually damage a company’s relationships with its customers!
Have a look at this interesting case study by Thomas Davenport which raises important questions about how Marketers need to develop their database marketing in a responsible way!
Here is Thomas Davenport's case: Analytics can be harmful