Scaling the Wall of Consumer Trust

A recent story about Facebook in USA Today has attracted a lot of attention regarding responsible data use in the social medium. It also underscored a very basic, and troubling, disconnect among consumers about their own role in any online transaction.

The story revealed that Facebook has been able to log all the Web sites its roughly 800 million members visited in the previous three months. In addition, it reportedly tracks the Web activity of millions of non-members after they happen to visit Facebook.

These activities have captured the interest of federal regulators, who are looking into whether Facebook is making too much personal information public. At heart is the tracking debate, and whether consumers should be able to stop advertisers from following wherever they go online.

The potential blow back by consumers could cost Facebook some of its hard-earned loyalty. Facebook’s appeal has been that it serves as a haven for people who want to share personal information with a select group of friends. It “gets” its members by providing them a like-minded forum and then furnishing it with games, fan clubs and other activities that further organize consumers by their values.

But no one values being misled, and this brings us to the pertinent Facebook question. Is tracking someone’s activity considered an invasion of privacy and an abuse of consumer trust?

Many variables must be taken into account, but three important points come to mind.

1)   Transparency is critically important. Facebook answered USA Today’s questions about how it compiles data, but there seems to be a pattern wherein the social network reacts to privacy complaints rather than disclosing its practices up front. (Facebook recently settled a complaint that it deceived consumers by promising privacy protection while it actually shared their data.) It is simple: The more clear you are about how you use the personal information customers share with you, the more engaged they will be. They understand not only what you are trying to do, but what’s in it for them.

2)   The Web is not free. Sure, you do not have to pay a subscription to get on Facebook, LinkedIn, or even, but your participation, your searches, your “likes” and dislikes are being used to support revenue in some way. Which leads to the third point…

3)   Consumers still don’t understand the extent of the trade-off central to involvement in social media. When people enter a public site such as Facebook and agree to use its features, they are entering into a transaction. They provide a treasure of personal information—presumably to better serve their needs and aspirations. We in return are to deliver on that expectation, while respecting their trust and not abusing the information we collect.

What is most troubling is consumers may be resigned to excessive use, or misuse, of their personal information. What are loyalty marketers to do? The best start is to simply stick to your values of transparency, reasonable data use and fair value.

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