Can Marketers Use the "Data Minimization" Approach?
Peter Fader,
Professor of Marketing at the Wharton School, puts forth a "data minimization"
approach for companies arguing that the histograms you can infer from doing more
basic one time analyses, is more cost effective approach to marketing.
It's an interesting argument as it hones in on 1-to-1 marketing's achilles heel,
that of the relative ROI of 1-to-1 compared to the organizational investment
required to realize this marketer's dream. While it's true that 1-to-1
messaging is difficult and expensive for most companies right now, there is a
greater long term disadvantage to "throwing away" historical customer purchase
data. True, credit card & billing data are a risk for an organization
to house and guard, but this information can safely be stripped without having
an impact on order level or purchase history. Also, the cost and
complexity of safely storing customer data is coming down greatly. Well
thought out data security policies can guard marketing & IT teams from
mistakes, as long as the policy is carried out regularly (archive data offsite,
secured & detached from external networks).
Think about the
danger of not having access to your customer data - what if the histograms that
you produced in the early part of the year, prove to be fine for a time, but
you'd like to compare the effectiveness of this model against one that your team
put forth. You'd have to wait 6+ months to aggregate enough data for the
second model to show itself worthy, but not if you'd have simply kept access to
the data.
For smaller
companies, however, this may be a good option - but only if there's a high
hacking risk and lack of technology support internally. It's better to
reduce risk at that point than to save data for a rainy day - if you don't have
a current plan of using your customer data for marketing activities in
the next 6 months, then it will not likely be of use
anyway.
Comments (0)
Posted 8 months ago
by Luis Paez
