A New Way to Think About Data Privacy

April 11, 2021

“Privacy is not a religious debate. It’s an economic debate.”

So says Professor Mohan Sawhney at Northwestern Kellogg in an online course I’m taking, and he’s right.

Think about it – we all want to keep our data private. But, the minute we have an opportunity to trade our data for airline miles, video game rewards, or even a free coffee – stuff that we really want – we’re willing to make the trade.

We don’t take a moral stance on whether or not to share data. We share data if we get something worthwhile in return – which Professor Sawhney calls return on engagement (ROE).

If sharing data is an economic decision, then we – the brands asking people to share their data – need to think first about what value we’re providing in exchange.

Today’s reflection is about data privacy – the privacy paradox, why the paradox exists, and how the changes to data privacy laws will drive innovation.

Personalization vs. Data privacy: Getting the best of both for CX by Nikoletta Bika. Nikoletta discusses the privacy paradox – a misalignment between people’s views on data privacy and their behaviors. The bottom line – people will share their data if they trust your brand. More specifically, they will share data if they know it will be used to their benefit (ie. ROE) and it won’t be misused. Her view aligns with Professor Sawhney’s, with an additional “don’t be a jerk” factor. She lists somewhat obvious ways to build customer trust through data – don’t break the law or be inappropriate, be transparent but not creepy, and be smart about data collection.

The privacy paradox – Investigating discrepancies between expressed privacy concerns and actual online behavior – A systematic literature review by Susanne Barth and Menno D.T. de Jong. In this very long scholarly article, the authors discuss the privacy paradox from an academic perspective. No need to read the whole article – honestly, the discussion at the end falls short. Just check out section 3.2.2, which provides evidence that people underestimate risk of privacy invasion while simultaneously overestimating the risk to others, and 3.2.3, discussing why the promise of immediate gratification outweighs future privacy concerns. It’s a little geeky, yes. But fascinating.

If You Can’t Give a Customer a Cookie by Tim Hayden. Google, Apple, and Firefox are all cracking down on how we use data to protect individual privacy. Add this to the data privacy laws being set around the world, and it feels like the world is throwing darts at our ability to personalize our customers’ experiences. But, Tim sees this as an opportunity to shore up our data policies, operations, and what he calls “data stewardship”. By respecting the rigors involved in data privacy, we go beyond compliance to finding innovative ways to manage and take advantage of customer data with customers’ privacy in mind.

 

This article was originally published in Megan Gilhooly’s Friday Reflection, where she shares her unique perspective on recent events and how they pertain to customer experience, content strategy and business leadership. Megan is VP of Customer Experience at Zoomin and previously led global content teams at AWS, Amazon and Ping Identity. You can subscribe to her weekly newsletter here.

 

 

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