Are marketers ready to navigate IoT privacy concerns?

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Privacy is a perennial issue. Whether it is a data breach at the IRS, deliberate leaks such as the Panama Papers or simple non-compliance of data rules, privacy is a regular source of news stories and concern to those responsible for managing personal data of any kind. The Internet of Things (IoT) has potential to make this level of concern look small. IoT data can expose more—and more intimate—information than has ever been shared in the past, and customers are waking up to this.

So how can marketers navigate their way through this minefield?

Marketers need to understand that their customers are anxious. A recent survey by Fortinet revealed that 69 percent of people are either "extremely" or "somewhat" concerned that a household appliance could be involved in a leak of personal information. Around the world, a majority of respondents agreed that their privacy was important, and they did not trust how their data might be used. People do not understand the potential, and they are not prepared to trust without proof.IoT

Marketers should build on their existing opt-in culture to really exploit IoT data. An opt-in culture has been established in marketing for a long time. And while people complain about the lack of consistency about whether you tick a box to opt in or out, they also understand that they can change their preference at any time and, most importantly, their wishes will be respected. Marketers need to emphasize that this will continue.

Putting customers in the driving seat allows them to take control of their own privacy. This is an extension of the opt-in culture: nothing is done without authorization from the customer. For example, London’s Regent Street has a system of beacons that can interact with mobile devices to provide offers and invitations based on precise location and preferences. However, this can only happen if the customer downloads the app, completes a short questionnaire and gives authorization. Thus affecting the amount of IoT data streaming into the companies.

The customer is in control

It is important to provide customers with good reasons to opt in. Think of the earliest loyalty cards. Customers opted in by the thousands because they got something valuable back, usually discounts or offers at first, but later, points that they could use towards rewards. The principle has not changed. Customers understand that it is a business deal: they give data about their habits and behaviors, and they get something back. It’s all about how they rate that ‘something back’.

Customers want personalized experiences that are consistent across channels. Customers are genuinely keen to be seen as a single entity, even if they use multiple channels. They also want an ongoing relationship, and to be treated as an individual, not part of the masses. Many, however, are wary of sharing the very information that could enable this to happen. Marketers need to get better at explaining why sharing information is important for customers, as well as for businesses, and how it could improve customers’ experiences.

Increased sharing should be rewarded. Some customers are prepared to share more information, which of course means a greater return for the organization. To encourage this behavior, these customers should be given additional rewards, and this contract should be made overt, not clandestine. Customers need to understand the contract into which they are entering. With transparency comes trust.

The relationship needs to be supportive not exploitative. Any relationship is two-way. Even though some are unbalanced. A parasitic relationship—all take and no give – is unlikely to be welcome to the person on the receiving end, who is likely to go out of their way to end the relationship. A symbiotic relationship—one of mutual benefit – is much more likely to endure. Think about a supportive manager who gradually overcomes an employee’s fear of being open by responding helpfully to any disclosure, and not using it to exploit the employee.

Building on strong foundations

The good news is that marketing seems to be well placed to take advantage of IoT data, and be able to address data privacy concerns. The rise of content marketing has driven a move towards developing relationships with customers, rather than a transaction-based model. And the opt-in culture is a strong basis for building trust.

Marketers now need to take these advantages and use them. They need to build good, human connections, that provide value to both sides, and make sure that both sides understand the contract that has been drawn up. Embracing transparency is likely to be key to building trust, and generating true value from IoT data.

To truly understand how IoT data can provide new revenue opportunities for a business and increase customers’ satisfaction, read the white paper The Internet of Things: Marketing’s Opportunities and Challenges

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About Author

Rene van der Laan

Director, Global Practice - Customer Intelligence

Rene van der Laan celebrated his 20th anniversary in the enterprise software business in 2017. Although he can be considered a software veteran, he is still not done learning, thinking and definitely not done talking. Rene closely follows the ever-evolving world of marketing, customer experience and analytics. In his international role at SAS Institute he evangelises the Customer Intelligence topic - in his presentations he does not shy away from statements like: "without analytics, marketing departments lose their right of existence", "most companies underestimate the value of the customer experience" and he challenges organisations that often have no clue who their customers really are and don't know which direction the organisation should take with their customer journeys. The bold statements are based on the many conversations Rene has with marketing, analytics, digital and customer experience professionals as well as with their respective leadership. SAS' software solutions can help organisations to rise to their challenges, with a joint roll-up-your-sleeves mentality to deliver the ultimate experience their customers deserve - while keeping the organisation's objectives in mind. In his spare time, he also does not just shout from the sidelines, but during the weekends he leads many hockey matches to sporting success or he coaches one of the kids to victory. If he is not doing that, you will probably see him working on his handicap on the golf course.

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  1. Pingback: Ahead of the IoT curve? - Hidden Insights

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