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Carrol Capital

Ethical dilemma

page break line Ethical dilemma

Those grocery store loyalty cards we swipe to save ten cents on a gallon of milk or a nickel on cereal are often collecting customer data as well. But is it ethical for the grocery store to sell those records to other firms? Weighing in on this in a recent Harvard Business Review article, associate professor of marketing Katherine Lemon says that any sharing of customer data between firms must maintain respect for the customers' privacy. Lemon notes that one of the unintended results of such information trading could include a customer's purchase data ending up in the hands of a health insurance company, who could potentially adjust rates or cancel coverage based on dietary habits. These types of inadvertent consequences could harm loyalty programs and the valuable data they supply to the initiating corporation. The ethical solution in this case, Lemon says, is to "let customers opt into their data-sharing arrangement," creating transparency and confidence.

"The Dark Side of Customer Analytics" can be purchased here