The Dark Side Of Customer Analytics?

The May 2007 issue of the Harvard Business Review contains a case study entitled “The Dark Side Of Customer Analytics” by Tom Davenport and Jeanne Harris, authors of the book “Competing On Analytics”.

An intriguing title, for sure. But completely misguided. The crux of the story is that an insurance firm purchases loyalty card data from a grocery chain and finds interesting patterns in the data — patterns that raise questions about how to responsibly apply the insights it has gleaned.

My take: This is the “dark side of analytics”? That’s like saying cars are evil because they can go 90 MPH and kill people if they crash.

Unethical — or even questionable — use of data is not an indication of the dark side of customer analytics. Analytics is just a way to make sense of data. What the case study reveals is the dark side of a corporate culture that tolerates, allows, or encourages the irresponsible use of data, and the dark side of a corporate strategy that needs to irresponsibly use data in order to succeed.

Give credit to George Jones, CEO of Borders, who commented in HBR that marketers are often tempted to use data in ways that seem attractive, but that ultimately harm customer relationships. Mr. Jones said that, at Borders, “the culture is such that managers would have just assumed that we wouldn’t do something like that” (i.e., violate customer privacy).

It’s not for the customer analytics folks to establish that culture. And a culture that pushes the envelope on privacy is most certainly not an indication of the dark side of customer analytics.

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