Tuesday, December 11, 2012

We Know Who You Are - Database Tracking

We Know Who You Are - Database Tracking

Imagine a Matrix type movie environment of everyday life where every action you take has been captured and used to predict, model, and game your behavior to assure the system knows how you will respond to any given situation; it sounds far fetched.  Unfortunately that situation exists now and happens every time you buy anything, interact online, use your phone, or even as you drive your car.  I know this because my real job is as the executive marketing strategy expert
- Chief Marketing Architect for one of the largest customer management solution companies in the world. I am the guy who designs these systems for the largest companies around the globe and in fact I have been noted as one of the best in the industry at developing these strategies.

The idea for most reputable companies is simply to put the customer at the center of everything the company does, to anticipate customer needs at the right place, at the right time, and via the right method; be that a personal visit, email, phone call, personalized web content, in car services, social, and mobile interaction. In the military they call this “intel & tactics", in the corporate world we call this intelligent commerce.

In the right hands, this technology delivers you the customer, a better customer experience, more relevant offers and information, better long-term service, and automation to take care of things automatically for you, all for less money. In the simplest of ways, we want to assure you feel like you are getting that same level of customer service you would get from Bob’s Hometown Hardware where Bob knows you by name and also knows you have started a remodeling project.  When you come in he greets you by name and offers to sell you a ladder and paint at a special deal for the project in the color he knows you like.

After you place an order, he calls to let you know the paint sprayer you ordered is in and ready to be picked up. He throws in dropcloth because he knows you are a messy painter because of your paint covered jeans.  This is great customer service and is exactly the reason you shop at Bob’s versus Ralph’s who is run by short attention spanned teenagers. Bob may be a smart guy, however he cannot manage Billions of customer contacts a year, so we turn to database systems to hold that data about you, use marketing intelligence to push you customized offers that are specific to you at the register, online, or even in your car. 

Ever surprisingly had a coupon delivered a week after you bought something in the store? This is a technique to keep you in the buying cycle and is no mistake. How about a reminder for an oil change almost exactly the time it needs to be done... and why do you start getting special offers three years after you bought your last refrigerator? Statistically we know most refrigerators only last three years from the drastic increases in service records for a particular model and start sending out specials when we know your refrig will start acting up.

OnStar for example knows through GPS data and your registration where you are, how fast you are going, what direction you are heading, and all your contact and vehicle information.  Ever wonder how they offer you a selection of restaurants when you just tell them “near me now”? The answer is database driven customer centric intelligence. This is convenient and handy and all accomplished by the systems and strategies, folks like myself develop.

The databases that predict whether you will most likely buy a red or blue hat with that scarf can also be used civically as well. IBM’s Watson based CopLink technology was instrumental in the arrest of a kidnapper and saving the little girl abducted. The CopLink system found the highest likely criminal in the area including one with 53 prior arrests and an abduction record. CopLink predicted his most likely location and allowed the arrest in less than 30 minutes from the initial abduction. Cool technology indeed.

While I was working with a major retailer we combined predictive weather data to do neat things like push snow blower offers only to people who were about to have a big snow storm roll in and tank tops to areas that were having a heat wave.

Other uses can be a bit sensitive.  Twelve months after my father was widowed, he started receiving offers from dating sites.  This upset him and asked me how he was receiving these offers. My response was that death records are public record and are used to create a deceased file. These dating sites use a deceased database file and then look at who is the other head of household, wait typically twelve months after a spouse dies to begin sending them dating site offers. The younger the person being solicited the shorter the wait. My father was stunned that people actually knew he was single, however he was still offended.

Most companies do everything possible to assure the use of this information does not end up as a PR nightmare and assure it is only used for the betterment of serving you the customer, however with power occasionally comes misuse. The less mature executives often wield this powerful customer knowledge about as responsibly as a busload of hormonal teens would wield gasoline and matches. All too often, I have pushed away from an executive’s table politely telling them they are not ready to handle this level of customer understanding. 

In one rather engaging discussion with an executive about what what morally responsible versus what was legal, after noticing a picture of his young 18+ year old daughter on his desk, I asked how he would feel about his daughter's age and purchasing habits being shared with other companies? He did’t necessarily have a problem with that. I then asked, how about if Planned Parenthood purchased that data and a Facebook scrap of her sexual and dating activities and then started soliciting her with their services? In an actual case study, I cited Target’s analytical buying behavior engine which predicted a potential pregnancy based on several products being purchased together. The end result was a marketing email offer for baby cloths landing in the household email box offering a father’s teen daughter baby cloths... and the punchline was that the daughter had not told poor old dad yet.  

Yes, predicative marketing analytics can be a bit more insightful than your dad, however will still need dad to storm into Target and tell them they are “sons of bitches” to stick up for his daughter’s virginity, which he did.  Later the father apologized to Target and admitted the marketing offer was unfortunately more knowing than he and correct in its insight. After that example hit home, the executive I was talking with reconsidered his entire strategy, because that my friends is a PR nightmare and proves some things you should not do, even if you can.  

Unfortunately from a legal perspective companies cannot just erase all the information in their files about you. They need it from an accounting, warranty, and auditing perspective, so even if you are super paranoid, the best you can ask for is a “Global Opt Out” of all their marketing which effectively puts you on the dead/unresponsive customer list. Obviously the problem is you will not know about all the sweet deals going on.

The marketing, sales and service side of things is easiest to describe, so I will discuss what companies do from that perspective versus clouding things up with supply chain management, HR, and accounting data. We marketers/sellers start by building a database through customer captured information, such as when you buy something and through customer self reported information, such as signups for newsletters, loyalty cards, giveaways, and site shopping preferences you provide. Literally every company from electricity utility companies to Bob’s House of ammo collect this info... they have to for tax and auditing purposes.  We load all that data into our systems and begin to develop a profile on you. Now you are being tracked and once you are in you will never be anonymous again. Some call this concept big data.

Once in the system, we begin sending you direct mail (postal), perhaps call you, and assuming you have opt’ed in to receiving emails, we will also start sending marketing emails as well as bills if we are selling you something. 

To make the data more valuable than just a name, address and your RFM (Recency, Frequency, Monetary - last transaction, how often, and how much you spend) information we capture with every sale, we need to hygiene/clean and append/add information to that database to know more about who you are.

There are a number of companies whose sole purpose is to clean up standardize and enrich company marketing databases.  Hygiening will generally remove all the duplicates, capitalize all the letters, perform a profanity filter, and validate/correct all addresses based on the US Post Office National Change of Address, Delivery Point Validation (mail routing for presorting), and CAS certification (barcoding). The clean up usually includes a re-householding which says that Suzie and Bart live in the same household as Tom, Jane, and Lucy. Most companies will re-household once a month to assure your bills are going to the right address or to assure you can get that junk mail we just sent out.  Police will use this information to understand who knows who and who lives together... obviously handy information.

The US Post office will also provide a service which is referred to as the new mover file but is basically a record of your formal change of address notification. By adding in useful data like a new mover indicator, this data let’s us know you just moved into a new home or office. Because we generally need a whole bunch of stuff when we move, this makes you a prime candidate for marketing from everything from utilities, to maid service, to refrigerators.

Other typical data we normally want a servicer to add are things like your age, household income,  social media ID, your personal interests (compiled by magazine and online subscriptions), purchasing habits, ...etc. Public records such as marriage, birth, divorce, bankruptcy, death, and high school graduation information are captured and used.  For those things we don't actually know, we rely on modeled/suppositions which estimate things like how many dogs, disposable income, and number of cars and children you have based on purchase and any other data we have available.

Once we have all this data we begin to profile you.  If you bought mens size 11 shoes from us, you are labeled as a mens shoe buyer and get offers for mens shoes or notified when we have super great closeouts on size 11 shoes... same goes for everything from electronics to Diet Coke to whether you are single and looking for a date. Your name may be in hundreds of buyer segments.  Then we start the fun stuff which is modeling and predictive analytics which looks at how you have responded to offers previously and lets up predict with a pretty close certainty how you would respond to this offer versus that one. We have systems that can make you a special customized offer real-time anytime you log into a site - most sites call it “personalization”.

Actually we have it down to such a science at the accounting level that we can ask corporate executives whether they would like to maximize profits or maximize gross revenues.  We can push high volume low margin door buster deals or concentrate on individuals who are not shown to be price sensitive. Although creepy, we know for the most part, how often, when, where and what you buy, interact, surf, drive, shop, sleep, work, and even what you eat. 

How do these guys get all this information about you? It is called compilation. Most companies sell their marketing databases as a profit revenue producing center for the company to other companies. It is a very common practice. In most cases, the service compilers buy all these various bits and pieces and like detectives put all the pieces together to paint a clearer picture of who you really are and how you behave. For certain applications, credit and criminal background checks are added to these files, however legally only for credit issuance or employment use.

As discussed if Apple, Google, or any number of credit card companies or large retailers have this information plus whatever they already have about you, they know more about you than most people would feel comfortable with including everything from your birthday, ring size, shoe size to the last time your car had its oil changed.  Some companies do not go this deep however some are extremely invasive.  A few years ago Sears Holding actually paid customers to load a trojan horse which tracked everything they did on their computer on and offline and stunningly people did it. This moronic irresponsibility lead to fines and special FTC oversight for Sears Holding. 

On the responsible company's side, these systems allows them to manage inventory, servicing, vendor management and many other aspects of their business which in turn drive costs down and deliver you more of what you want faster, less expensive, all when and where you want it. 

THE GREY AREAThe good of the concept can be executed as simply as automatically sending you a new water filter for your refrigerator every 45 days or letting you know it is time for your oil change, the bad though wanders into a grey area tip toeing on legality and PR nightmares.
A couple things I will throw out here that will make all your hair stand on end. Apple, Google, Blackberry and other cell phone carriers track where you are and where you go via your phone every moment via GPS and cell phone triangulation.  Most installed Apps do the same thing.  Most also log which wireless devices you are near in order to improve GPS tracking/directions.
The Google Maps truck also records the WIfi hotspots as it drives through a neighborhood... and did you know they own their own Predator Drone for mapping. For most people, Facebook is a permanent record of every damn thing you have done since you first signed up and they are profiling and selling all that information to other companies. We have the ability to use facial recognition to record who are your friends based on picture you post... thing about that for a minute. How would you like a cop to knock on your door because you had a picture with some wallet lifter.

Most gas and electric utility companies can tell how many people are living in the house or when you work or are on vacation based on changes in your consumption rates by the day. Some police cars are equipped with character recognition scanners that will scan up to 30 license plates a second, reference a database to see whether you are “wanted”.  
Not sure most people know this, however if you have a CCW - concealed carry, you should hand the officer your drivers license and CCW license because as soon as they look up your info, a field will pop up telling them you are a CCW holder... they know, so tell them because in our state it is a requirement.

Should HR staff be able to disqualify you based on your Facebook posts or on a Twitter post? Legally, I think this is a class action lawsuit waiting to happen, however it should be noted that most HR systems do pull all social media data into your file as well as reading discrepancies in work experience between your previous resume submitted versus your current “version”.
Facial recognition technology has been used for some time to analyze social media and website photographs to build relationships of people in the pictures. Many credit card companies are considering using cell phone GPS positioning to model your know use locations to know when your credit card is being used at a different place than your cell phone.  Not sure I want my either company to have all that data. Almost every website drops a cookie on your computer to track your online click behavior from some aspect. Many search engines such as Google, MSN, and Yahoo allow you to have a customized search experience based on your historical searching and browsing behavior. Internet providers have the ability to pinpoint the address of any wired device accessing internet down to your device’s MAC address and record everything you do online while connected.  But encryption stops that right?  Ahhh sure... that way you can sleep at night.

OPT’ING OUTYou may be thinking that this is all super creepy and you want to push the reset button somehow, however you can’t. The best you can hope for is to pay cash where possible, because every time you pay via a credit card we know what you purchased, how much and where, along with all the identifiable credit holder information. That I know of no single customer facing company has or is watching all these pieces of data I have mentioned, however someone is and it is a matter of time before all the pieces come together in one very scarey way.

Luckily the Government is marginally good for something.  Take a look at this FTC link which can get you removed from the “marketable” lists. http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt063.shtm You will still be in the system, however companies will most likely not spend good money adding and compiling data about you if you are permanently opt-ed out.

Now that you know how we database illegence folks do it, the question might be what keeps me up at night.  My fear is knowing that someone somewhere is putting all this information together including my cell phone bills and call records, how much natural gas my house uses, the contents of this article, nightflight mapping (which can show when my lights are on and off establishing a pattern of when I go to sleep), all my browsing behavior, as well as all the cell phone and tracking information and facebook posts. It is a bit creepy when we start to add up all the little pieces of info out there about you and I.  The one thing that keep it all in check is PR - public relations.  If you start bitching about how violated you feel, the less companies will dig down into the rabbit hole of the intricacies of your life. If some company gets a little to close into your personal space tell them.  The last thing any company want are their customers rioting in the street.

My advice is to limit your exposure the amount of information you provide any company and where possible just pay cash, don’t use customer loyalty cards, limit credit card use, turn off location services on your phone where possible, set up a gmail or yahoo email account to bounce all emails through to assure no one has your “real” email address, use a PO box for your mail, and most importantly lock down your facebook account so only very close friends can see where and what you are doing.   

This is information I thought you should know and be aware off, because after all we do know who you are.

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