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Do You Take Me For a Chump?

Consumers are fine offering their personal information online or through their smartphone; they just want a fair exchange and respect

The essentials

The collection of personal information from website visitors and smartphone users remains a hotly contested marketing practice. While many consumers seem to value a customized browsing experience and targeted ads, they are quick to lash out at firms that take a heavy- or under-handed approach. What’s the psychology behind these concerns? Laurence Ashworth, associate professor and Commerce ’83 Fellow of Marketing at Queen’s School of Business, says consumers are seeking a fair exchange in how their personal information is used and want to be treated with respect. He discussed his work with QSB Insight.

Two Views of Personal Data 

We know why firms collect consumer information online. They collect it for market research purposes, for more targeted advertisements, tracking consumers, figuring out which ones are most valuable. It’s part of their business function. Consumers don’t see it in quite the same way. If anything, they’re more likely to see it as an exchange. They feel they own the information and that you’re taking something that is theirs. What that means is they expect something in return. 

You can’t really talk about consumer perceptions unless consumers at least have a sense that information is being collected and some beliefs about how it’s being used. In fact, I would say most consumers aren’t fully aware. When they are aware, though, one of the reasons people react the way they do is because they often view this as an unfair exchange. We know that unfairness is an enormously important social goal and when you violate it, consumers react badly.

Since we started doing this work, we’ve actually seen many firms being more upfront with their information methods and techniques and what they do with the data. One of the things they’ve realized is that consumers are frequently happy to offer information as long as they perceive it to be within the context of a fair exchange. Consumers react much worse when they find out retrospectively that you’ve been taking it. That’s for at least two reasons. One is the dishonesty and injustice, and two is the uncertainty with what’s happening to the information. Whereas if you tell them upfront in a simple way, they can make an informed decision and if they don’t like it they can move to another firm. But the truth is that consumers are pretty flexible once they know.

R-E-S-P-E-C-T

Providing people with explanations [for why consumer information is being collected] conveys a lot more than just the explanation. The act of explaining tells consumers what you think of them. It signals that the consumer is important to the firm. When a firm collects information on the sly and uses it in a way that benefits them and not the customer, not only is that an injustice but it’s threatening because of what it conveys about how much the firm values their customers.

You could say firms shouldn’t have to ask permission because consumers don’t even care about this. You may not even see that information as belonging to the consumer. But if the consumer feels this is their information, not asking permission is deeply disrespectful, even if it’s a minor matter. You come to my office and borrow my coffee cup without asking me. I don’t care about the coffee cup; I care about the fact that you took it without asking me. It’s the same thing. 

By recognizing why consumers are reacting negatively, firms can actually play to those reactions and create an asset that they wouldn’t have otherwise had. Some firms are already doing this. Google’s been upfront with some of its information collecting and usage policies and they’ve taken to heart this idea of making it really simple. What it does is that it reassures customers that they’re valued and respected and that the firm wants to conduct business reasonably. So it’s something that can be turned around. 

Is the iPhone iOS Overreaching?

I understand why Apple does it [gives iPhone users the ability to simply switch off wireless tracking for all apps]; they’re providing customers with the means to opt-out of the system. But actually, that’s not exactly what customers want. What they want is to avoid marketers simply taking the information without asking them and using it for purposes they’re not aware of. The irony is that Apple is taking something away which seems to be satisfying consumers. My suggestion in most cases is to allow for location information to be traded, which implies first that consumers have to be asked. 

The same is true of browsers. You can request that sites don’t track you, but that blocks cookies from being stored on your computer. Most sites use these cookies for positive reasons; they’re trying to offer a more customized experience. I think consumers have learned that it’s better, but they want to be able to make that decision.

Apple says they empower consumers by allowing them to switch off all app tracking in a blanket way, but that’s not really full empowerment. Empowerment would be to allow consumers to make individual choices. The Android operating system allows users to adjust the information that is taken from your phone but you have to do it on an app by app basis (and it’s time consuming and not totally obvious how to do it), whereas with Apple you can just stop all notifications from apps with a single button. I would prefer to have some sort of hybrid option, where you can turn them all off, but also easily turn back on those that are most useful or trusted.

Interview by Alan Morantz

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Smith School of Business
Goodes Hall, Queen's University
Kingston, Ontario
Canada K7L 3N6

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