Is It Customer Profiling Or Harassment?
A Boston start-up called Verbind Inc. has developed one of the many new software products to help e-commerce sites predict their customers' actions.
By shadowing a site visitor's every move, then crunching the results, Verbind's LifeTime software program is supposed to be able to separate the wheat from the chaff -- or the buyer from the browser.
If that were as far as it went, most people wouldn't object -- but identifying the buying habits of customers just scratches the surface of LifeTime's deep prognostication abilities. In fact, through probing customer-transaction records, ameliorating actions are triggered to stop potential losses before they even happen.
According to the Wall Street Journal, Fidelity Investments, for instance, hopes the software will serve as an early-warning system that lets it know when customers are about to bolt and take their business elsewhere. One sign could be if a customer begins redeeming mutual funds for cash. But here's where it gets sticky. Once this action is flagged, Fidelity would then launch a preemptive strike to save the account -- even though the customer has lodged no complaint.
"If we call them and they say 'I've been taking the money to invest in individual securities,' we could say we're able to help with our discount brokerage business," Sean Belka, senior vice president of customer segment marketing at Fidelity told the WSJ. By the way, Fidelity is one of Verbind's venture-capital backers.
How does it work?
Ordinary database marketing tools try to predict customer actions based on known habits of demographically similar customers, while LifeTime keeps close tabs on an individual buyer's transaction history on its "virtual map." It monitors a wide variety of activities, from calls to customer-service lines to transactions performed at a bank's automated teller machines. Verbind executives told WSJ that they don't think customers will feel their privacy is being violated if its system prompts calls from a bank or a catalog company with which the customers already have dealings.
What planet are they from?
This is exactly the kind of invasion of privacy George Orwell foreshadowed in his novel "1984." Not only does this automated Big Brother from Verbind spy on your every move, but it also alerts company thought-police to make sure you don't stop buying, or exercise your right to do business elsewhere -- without a little arm twisting first. The only thing it could do that would be more invasive would be to give you an electric shock every time you failed to make a purchase.
This type of over-aggressive marketing that turns technology into a pushy salesperson is fueling the popularity of Truste's Web site. The company promotes programs that protect everyone's right to privacy. In addition, Truste educates consumers on how to protect themselves against the type of invasive probing software programs like LifeTime perform.
The best way an e-commerce site can guarantee that its customers will keep coming back, is not to snoop on them or dun them, but instead give them great service and a good product.