I wrote something for Harvard Business Review on competitive advantages of being forthright with ethical data practices and understanding shifting norms about data uses.
Firms have a competitive interest in clarifying their role in what is a messy and poorly defined ecosystem. Even data brokers are starting to acknowledge the need to foster a discussion about the ethical uses of data. Consumers and firms are bound to have different ideas of what constitutes reasonable uses of data. One way to maintain customer trust is to be honest about those differences and then engage consumers in conversations about data tradeoffs. If you don’t get in front of these questions on your terms, you can be sure consumers will adjust their preferences or consumer protection regulation will force the issue.
So how do you get your data story straight so that your employees and your consumers know where you stand? Instead of talking about how you could use data, start talking about how you should use data, taking customers’ potential reaction to those uses into account. It’s not always possible to know how consumers will react, but here are four guidelines to consider:
Gut check your data uses. If consumers knew how you were using data, would they cringe? It is a deceptively simple exercise, but it’s a good start for testing norms.