Mailing Lists – How We Hate Them!!!

tlgEverybody knew Wait, the neighborhood butcher when I was growing up. Walt, in turn, knew everybody. He knew that my mother ordered a pot roast for Sundays. He knew that Mr. Schlampp wanted fish on Fridays, and that Mrs. Levine bought kosher food. He knew our addresses and phone numbers, when the grandkids were coming home to visit, our birthdays and our paydays, and whose charge accounts were in arrears. Walt’s customer database was in his head.

Walt used his database for marketing. He called us if he had a particularly nice roast. He did not call Mr. Schlampp to offer him meat on Fridays, nor did he offer pork chops to Mrs. Levine. He cheerfully acknowledged his customers’ new cars, new dresses, and new hairdos and, as a result, probably got more business.

Because he was a friend and neighbor, we didn’t mind Walt using some of the details of our lives to better his business. Although Mrs. Brown next door suspected him of having a heavy thumb on the scale, for the most part we trusted Walt.

Consumers have no such trust in the companies that collect, sell, and trade their personal information today. Nor do they trust the automated robots that vacuum up the electronic crumbs from the “cookies” (files that keep track of all they see and do online on a hard disk).

As operators of small businesses in the computer age, we capture a lot of information about our customers in our own computer databases. We can also buy information about potential customers, whether our businesses operate locally, across the country, or even overseas. The lists can be as broad as every household in a certain city or as focused as all the credit cardholders who live in the three most affluent zip codes in a town, have teenaged children, and have charged at least $1,000 in Colorado between November and February.

If I were a travel agent, I’d want to send a brochure or two to the folks in that latter group. If I were the recipient of the travel brochure, perhaps I would think, “At last! A piece of interesting and potentially useful junk mail.” At least, that would be my first thought. But as with so many things in the computer age, second thoughts are sure to follow. Junk mail, the direct marketing industry is fond of saying, is simply mail that is sent to the wrong person. Someone, somewhere, would find the same piece of mail to be valuable. The problem is matching the right piece of mail with the right recipient.

In the discussion of junk mail that appeared in this space last month, the focus was on unscrupulous business operators who flood the Internet or U.S. Postal Service with messages, hoping that, out of the thousands that are sent, a few will land in receptive hands. This shotgun approach, known on the Internet as spamming, is widely reviled. But the opposite tactic–the laser4ike targeting of specific messages for specific individuals–is as appealing to businesses as it is troublesome on privacy grounds.

Database marketing is based on the increasing availability of information about individuals, made possible by computer records. There are now more than 1,500 commercially maintained mailing lists in the United States, ranging from relatively simple lists containing just a few snippets of data, similar to the information found in a phone book, to massive lists of tens of millions of consumers, including detailed records on health, finances, and spending habits.

Each of us has been captured in a computer file somewhere. The files grow when we enter school, sign up for a birthday party at the ice cream store, enter a contest, send off for a magic kit, get a Social Security number and a driver’s license, apply for a credit card, join the army, make a phone call, fill out a warranty card, register to vote, buy a house, order a sweater from a catalog, and so on. The lists are getting ever more detailed, and the latest trend is to consolidate multiple lists into a giant master file.

The Internet and the World Wide Web hold the promise of gathering even more finely detailed information on users, keeping track of what Web pages they view, how long they tarry over specific advertisements, and whether they purchase anything online. Most of the big database companies now use sophisticated software to analyze these lists, fine-tuning them to sift out those households most likely to respond favorably to certain products.

Viewed in a positive light, the precision of database marketing is appealing to any business that wants to gain new customers and make the most effective use of marketing budgets. It’s also a benefit to consumers who are more likely to receive useful mail.

Viewed in a negative light, these precision-targeted lists are cause for concern on privacy grounds. These unseen computers know far more about us than Walt the butcher ever did–or wanted to.

If you’re considering the use of such targeted marketing pitches, whether gleaned from your own customer database or taken from lists purchased from brokers or other companies, you have an obligation to use the information responsibly (for more on this subject, see “Direct Your Pitch” in this issue”). Businesses that gather consumer information from Web-browser cookie files need to set clear policies on the use–and protection–of that consumer data. Many states have laws restricting the uses of public databases, but even the big database companies say the rules are confusing.

In fairness to the direct marketing industry, abuses of consumer databases are rare compared with the vast amount of data being traded among companies. But database abuses are growing, and one of these days consumers, and perhaps the government, are likely to demand greater controls over the information being gathered and sold.

Those of us who run home-based businesses should be even more sensitive to the concerns over targeted direct marketing. Let’s face it: A lot of us work from home because we don’t want anyone looking over our shoulders. As business owners, we need to make effective use of the latest technologies, but we also need to stand up for the right to privacy, to use the available information responsibly, and to safeguard the data we gather from customers. If a business intends to sell or trade its customer databases, it has an obligation to inform customers and give them the right to opt out of the list.

 

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