The Era of Consensual Marketing is Coming

By Dr. Alan F. Westin

Introduction: The Harris-Westin Privacy Surveys

"Privacy Concerns and Consumer Choice" is the 20th national privacy survey that I have done with Louis Harris & Associates since 1978. It was made possible by a grant from Ameritech to Privacy & American Business (P&AB).

The Harris-Westin privacy series has produced three streams of resources:

All of these surveys have been put into the public domain. The questions and results have been published (with our analyses) in Harris-Westin Survey Reports. And, the full survey data have been archived and made available to interested parties for further research.

In my interpretive essay, I want to explore two questions:

American consumers in 1998 remain very privacy-concerned, and they are also becoming increasingly privacy-assertive.

As the Harris Executive Summary and the full report detail, there is no mistaking the direct concern that American consumers continue to have about privacy issues.

Overall, 61% of Americans today feel that existing laws and business practices do NOT adequately protect their privacy rights as consumers, though 69% continue to believe that voluntary measures by businesses represent a better alternative than government regulation IF businesses adopt such privacy practices.

What comes through as a clear trend in the 1998 results -- compared to earlier Harris-Westin privacy surveys -- is a rising privacy assertiveness by American consumers.

At the same time, American consumers remain prodigious buyers of new products and services, and very large majorities feel it is acceptable for businesses they patronize to look at their customer profiles to tailor offers to their individual interests.

American consumers probably have more choices of products and services offered to them by businesses than consumers in any other country in the world. And, they respond actively to such offers, especially when they connect directly with the individual's personal life situation and interests. Sixty-three percent of Americans (representing a base of 124 million adults) say that, in the past year, they purchased products or services from mail offers sent to their residence or office.

From a privacy perspective, consumers in 1998 say that it is acceptable for businesses they patronize -- such as banks, credit card firms, retailers, etc. -- to look at their profile of activities and inform them about products and services that might be of interest to them. Most consumers (61%) say this is acceptable in general, and total public acceptability of such profile marketing rises to 83% if a system is provided for notifying customers and giving them an opportunity to opt out of such marketing.

The same findings apply to how telephone companies, in particular, engage in profile marketing.

Sixty-nine percent of consumers say it is acceptable for local telephone companies to look at patterns of customer use of telephone services and draw on these to decide which customers would receive offers of new or additional telephone-related services. Again, if a description of such profile marketing and an opt-out choice is provided, total public acceptance for such telephone company use of customer profiles for its own marketing rises to 83%.

Almost the same high level of consumer acceptance 78% -- is registered when the local telephone company shares customer profile information with companies affiliated with the telephone-service provider, such as a cellular phone or internet-access-provider subsidiary that is part of a local telephone corporation, and if the company offers an opt-out.

Since 79% of the public in 1998 say they generally regard telemarketing calls to their homes to be intrusions, it is not surprising that 68% of consumers say they would exercise an opt-out and block telephone-company calls to their residence marketing telephone products and services, if the local telephone company gave them that option.

For telephone companies (as earlier surveys show for other consumer-service providers) notice, access and choice as to use of personal information by third parties are considered "absolutely essential."

With results in the 71-79% ranges, American consumers rate it as "absolutely essential" to their confidence in and comfort with telephone company handling of customer information that three organizational policies be followed:

The implications of these findings for business are that installing and following good privacy policies has become a customer imperative; but no "one size fits all" program will do for information-privacy in the future any more than for consumer marketing.

In many businesses today, with personalized marketing seen as the engine that will determine both growth and profitability of the enterprise, the consumer privacy issue is seen as a dangerous and threatening intrusion into a First-Amendment-based right to market at will to every last existing or potential customer. The prospect of offering notice and opt-outs for individual choice strikes fear (and loathing) into the hearts of such marketing executives, and also to many company lawyers, who rush to advise management that (in their industry) no laws today require any self-imposed limits on total-customer-list marketing.

The 1998 Harris-Westin survey results offer a different set of messages, ones that I think any business active in consumer marketing should consider very carefully:

In 1990, in a presentation and then as an article for the Society of Consumer Affairs Professionals in Business, I predicted that "consensual marketing" -- based on notice and choice by individual consumers -- would become the common practice for American businesses and personal-choice-oriented consumers in the year 2000. It may take a few years more to become the norm, but I firmly believe that this will happen, hopefully by voluntary business actions and whatever government support will be needed to assure such business practices. The 1998 Harris-Westin survey findings document that this is clearly what the great majority of American consumers want and expect businesses to provide -- personalized privacy choices in an age of personalized marketing.

1Louis Harris & Associates and Alan F. Westin, "E-Commerce & Privacy: What Net Users Want" (1998) and "Commerce, Communication, and Privacy Online" (1997).