Convenience over Privacy? Paying Attention to Consumer Trends

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I remember sitting with Mercedes-Benz executives a number of years ago to engage in a discussion of something I thought was revolutionary at the time.

By way of background, Mercedes-Benz USA owned and operated a dealership in Manhattan, which leaders used as a “test and learn” lab for customer experience innovation. The discussion I am referencing centered around whether to place RFID chips in vehicles being serviced at the dealership.

As you likely know, RFID stands for radio-frequency identification, and RFID chips are passive tags that pick-up electromagnetic energy from an RFID reader, which can send a signal about 1500 feet away.



The issue for our discussion was whether or not to place these chips in vehicles without the prior permission of the owner. Here were the arguments in support of the placement:

  • The chip wouldn’t track an owner’s vehicle beyond 1500 feet of the dealership (unlike the GPS already built into most cars)
  • The chip would alert the dealership that an owner was approaching the dealership, which could trigger the following actions:
    • An alert to the service concierge so they could meet the vehicle owner as they drove into the service lane
    • A digital and personal welcome on a signboard as the customer approached (e.g., “Welcome Ms. Jones”)
    • The ability to track the vehicle at all times in the dealership during the service visit

The obvious downside involved privacy concerns and customer perceptions that their vehicle was being tracked without pre-authorization. Suffice it to say the trial went forward and the benefits exceeded any of the concerns expressed during the discussions.

Fast forward to the present and I continue to be amazed at how eager customers are to trade privacy/information control for convenience. There is a caveat, of course. Company leaders must respectfully and thoughtfully protect the customer data and leverage it to enhance their experience, not simply use it to aggressively market to them.

Let me give you a sense of how far customers are willing to be tracked in the name of personalization and convenience. Granted, my example comes from Sweden, but I sense it is a harbinger of things to come on a global basis.

I have been watching this “Swedish phenomenon” for a while, but a recent NPR story articulates the issue well:

Technology continues to get closer and closer to our bodies, from the phones in our pockets to the smartwatches on our wrists. Now, for some people, it’s getting under their skin.

In Sweden, a country rich with technological advancement, thousands have had microchips inserted into their hands.

The chips are designed to speed up users’ daily routines and make their lives more convenient — accessing their homes, offices, and gyms is as easy as swiping their hands against digital readers.

Before you conclude this is “the mark of the beast” or “it will never happen here,” let’s look at why 4,000 Swedes have already turned to a company named Biohax International to have a largely consumer-oriented chip placed into their bodies. The chip allows those who implant it to have ease of access, ease of purchase (at vending machines and retailers), ease in transportation (no need for a bus pass when you have something in your hand that links to your bank account) and ease of identity verification (in lieu of other biometric markers or legal document). Imagine a future state where you no longer need to carry cash, credit cards, car or house keys, a driver’s license, a passport, etc.



From my perspective, this technology currently has a creepy big brother quality. However, I am certain we are moving closer and closer to a world where these types of technologies will become more commonplace. In my book recent book about Airbnb (titled The Airbnb Way), I take on the topic of convenience and the importance of delivering a technology-aided, human-powered experience. Biohax International has just taken that mindset a step further by driving the technology literally under human skin.

I would love to talk to you about how you are addressing the balance between personalization/convenience and customer privacy. Simply reach out to me here and we will set-up a time to talk.

5 COMMENTS

  1. This is a very thought-provoking post, Joseph. We all know that privacy thresholds for customers change with the times. I recall working in the banking industry in 1970’s when ATMs first came on the scene. Docutel (an early pioneer manufacturer of ATM’s) was surprised customers were reluctant to put their deposit in a machine they did not know well enough to invite to dinner. So, most banks posted a teller beside the ATM machine to allay customer fears and communicate there was no need to be concerned about privacy. And, they assured the customer they could still take their banking business inside to a live person. Still, it took years for the majority of customers to accept the idea of an ATM.

    Therein lies the solution. Communication, transparency, and choice produce a highly informed customer who elects to turn in their privacy for personalized treatment. And, the bank customer was never shoehorned into ATM or nothing. If I were Mercedes-Benz, I would put the RFID chip inside, explain to the customer its goal, and give them the option of deactivating it if they “do not want cookies.” We all worry about a big brother we do not know, especially one who tricks or dupes us without our consent or knowledge. But, if that brother was a happy-go-lucky person who tells great, self-deprecating stories at the family reunion, we might chose to loan him our credit card to go buy more ice for the big lunch spread.

    Privacy is in the eye of the beholder at a given point in time. Imbedding chips in your body sounds creepy to me today, but do I want the housekeeper in my hotel to notice I use extra towels and leave me a few spare ones? I do. Do I want the room service person to notice I never eat the kiwi on my fruit plate and put that fact in my guest profile for stays in that brand hotel around the world so kiwi stops being included? You bet. I stopped looking for cameras in the hotel guest room long ago.

    Thanks for raising this important topic. I look forward to seeing the responses. Good luck on “the airbnb way.” It is a great read as I wrote in my Amazon five-star review.

  2. Hi Joseph: I can’t judge anyone for how much privacy they seek or abdicate. It’s an emblem of our times that the ubiquity of mobile software applications has inured many people to having their most intimate details to escape into the cloud and beyond. As a result, unprecedented power has accrued to companies, while consumers have absorbed unprecedented risks.

    Personally, it has never been inconvenient to order a drink by verbally communicating my preference to a bartender. And it doesn’t bug me to have to announce my name to the auto dealer service desk worker when I drive in for an oil change. In fact, I’d be super-irritated at the dealership to see my name lit up on a sign board for everyone to see when I rolled into the arrivals lane. I know I’m far from unique.

    Still, I see great potential for the Swedish-developed embedded chip technology you describe. Could people who suffer from seizures be safer if they had implanted chips that could inform emergency personnel of their conditions? Would implanted chips reduce human trafficking, and protect other vulnerable populations? What would be the ramifications if, in the name of ‘public safety,’ governments mandated use of this technology for certain groups? What about ethical concerns, unintended consequences, and potential for nefarious use?

    Another matter to consider with implanted chips is what, exactly, constitutes acceptance of a transaction, and ultimately, payment. In the last decade or so, vendors have benefited by effectively ‘moving the payment line’, ostensibly for customer convenience. But technologies such as Apple Pay and implanted chips also diminish a crucial final step for customers: physically tendering payment, either by cash or credit card. I prefer doing this because it demands that I stop, look, and importantly, think before I part with my money. I question whether it’s truly beneficial for consumers to continually remove the pay barriers, impediments, stop-gaps, or whichever term you want to use.

  3. Chip and Andrew, as usual you are brilliant and thoughtful with regard to the benefits and risks of breakthrough technologies. Your insights on perceived privacy, vulnerability and trade-offs advances the conversation greatly. Thank you.

  4. Hi Joseph, I agree that this is a great post and as Chip said, very thought provoking. At 62 I am old enough to remember when we were truly free from being stalked by companies, (and governments, for that matter,) and I have to say I really don’t like the trend. No doubt your readers will remember the creepy way which Target used to identify women who were pregnant, and the negative response to that.

    You write, “…the benefits exceeded any of the concerns expressed during the discussions.” The benefits to whom? The business, of course. I can prove, for example, that my insurance company, Discovery in South Africa, installed a “black box” in my car, and, instead of rewarding me with cheaper premiums, (as promised,) they actually increased my premiums by a figure way above the normal rate of inflation. In one instance, I had to brake hard to avoid an errant taxi driver, and I received a call asking me if I was okay. That definitely didn’t feel good. One Sunday night on my way to a conference, on an empty road, I drove faster than usual and they texted me to say that I had exceeded the speed limit, almost wagging a finger at me as if I was a naughty child. And the worst? When my car was stolen, the rather clever thieves knew exactly where to disconnect the technology, and though I reported the theft within minutes, the car was gone forever over the border to Zimbabwe.

    It is true that RFIDs and other tracking technology may lead to some small conveniences, (such as the example Andrew mentions about having a health crisis and being unable to call for help,) but these are rare situations. On the other hand, I have to change my email address every couple of years because I end up getting hundreds of emails from people trying to sell me their stuff every day, and Google, Facebook and others stalk me with the darned irritating pop-ups that have nothing to do with what I really want to buy. It doesn’t matter that I have not been given the choice to not get these things – they come anyway.

    Do I have a need to be personally greeted by a hotel concierge at the moment of my arrival? Nah, especially when it is just their “duty” to do it and it seems rather unauthentic. And, Chip, I really don’t mind taking a few seconds to call the housekeeper to bring me an extra towel.

    The only exception for me is Amazon, but that is because they are far more subtle, and the focus is on me and my needs, not because they want to make a quick desperate buck.

    Thank you for a really great thought starter. I’d love to hear what others think. And, yes, good luck with your book.

  5. Today, the amount of personal consumer information which can be accessed and kept on databases or in the cloud is indeed staggering. Many accept this growth as progress, with privacy often being pushed to the side.. But the convenience landscape lens letting more info into the shot. and it is happening almost without our being aware of the changes. So far, there is relatively little regulation here, at least in the U.S., where customer data security is considerably looser than it is in other parts of the world, particularly in Europe (where the penalties for violating data privacy are pretty severe). My view is that U.S. companies will keep pushing the privacy limits until or unless there is more public consumer pushback.

    I’m kind of old-school here, and I find some of the info-leveraging approaches liberally taken by companies to be kind of annoying. Here’s a personal example. I recently had major repairs to my Audi A6, including expensive replacement of a water pump. One way or another, the dealership, where I bought the car and have had it serviced for years, has collected a lot of household info about me. After a couple of days, I turned in my loaner car, and picked up my now-repaired Audi. On the front seat was a portfolio placed there by the dealership’s sales manager, containing lease or purchase paperwork for a new Audi A6, along with information on several cars in stock – same model, horsepower, and features as mine – from which I could choose. I certainly didn’t ask for this, and I resented both the use of my personal information and the pushiness of the sales approach – – so much so that I’ve stopped doing business with this Audi dealership. This wasn’t convenience as much as it was, from my perspective, crossing the privacy line.

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