by Colin Jowell

It’s not every day that a seemingly innocent puff piece in a marketing magazine creates such a stir. Explaining why Woolworths Insurance offering wasn’t splashing out with a Coles style advertising binge, Penny Winn, Director of Group retail services, told Adnews that their superior customer data allowed them to be far more targeted. “Because, you see, customers who drink lots of milk and eat lots of red meat are very, very good car insurance risks versus those who eat lots of pasta and rice, fill up their petrol at night, and drink spirits. What that means is we're able to tailor an insurance offer that targets those really good insurance risk customers".

If you are slightly freaked out by that observation you are not alone - the story has been picked up by major newspapers and TV outlets, none of it  congratulating Woolworths on its superior marketing expertise. Instead, it has shone a light on the privacy issues surrounding data. The Sydney Morning Herald and the Channel 7’s Morning were alarmed, branding them “Supermarket Spies”.  The story covered a “US example” where a young girl had bought a pregnancy kit, scanned her card and thereby outed her secret to her father who then received baby related offers in the mail. Not only was privacy raised as an issue, but then the question of the value of the rewards in general was questioned as well.

Certainly, the media coverage is sensationalist: data-based marketing is a great idea. It’s really no more manipulative than techniques marketers have been using for years - tapping into people’s desire to be better looking, richer, better mothers, better lovers etc. etc.  We’ve just become a little more skilled at communicating it. The biggest issue with what Woolworths did is that they told people about it in a way that didn’t highlight the benefit. “We’re using the information to save people money” would have probably sufficed and even been welcomed. Punishing the pasta eaters, even if it’s only mentioned in a marketing magazine creeps people out.

We have the opportunity to be more accurate which is a great thing. The current negative reaction however reveals a vital lesson. For years, marketers have searched for ways to “reflect their target market”. Focus group after focus group has confirmed that this is the right thing to do. But the truth is, no one wants marketing to be that obviously accurate. For whatever information a customer volunteers on Facebook or through a credit card or loyalty scheme, the consequences of that disclosure should be delivered with care, and make the benefit to the customer obvious.

Whether computers of the future can learn the subtlety and sensitivity required to run data-driven marketing campaigns remains to be seen. But for now, even the leaders in data-driven marketing need to exercise a little bit of human discretion. After all, there is still so much we need to learn.

Things to think about:

  • Do collect data! Just ensure it is actually useful to your business
  • Communicate that knoweldge to customers so that they see the benefit too (or keep quiet!)
  • You may need new skill sets and experts in order to become better at data-driven marketing,
  • Human sensibilities still need to be applied.