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Is Privacy the Cost of Efficiency?

When it comes to our personal data, Americans are willing to share, but only if there’s a good reason. The question for companies managing data, simply put, is whether the privacy risk to a customer giving up a bit of personal information carries enough upside.

A recent Pew study examined this issue in depth. Pew found that most Americans are willing to entrust their sensitive health records to their doctor (54% called such collection “acceptable” with another 21% saying “it depends”), or even allow cameras in their workplace (52% “acceptable,” 20% “it depends”) because those measures are designed to protect their personal health and safety.

On the other hand, far fewer respondents (27% “acceptable,” 17% “it depends”) were OK with sharing home energy usage information, because pennies saved on their energy bill didn’t justify letting a company know when they were home or even what room they were in.

So what can companies who handle personal data learn? Here are some quick, basic data guidelines:

  • Be transparent. If your customers can’t be reasonably expected to understand the bargain up front, expect a backlash. Instead, ensure the deal you’re giving them is simple, straightforward, and fair.
  • Collect only the data you need. We know what the “big data” advocates tell you: the more the better. But you need to understand when you are reaching the point of diminishing returns or collecting data for some future application that is too distant or too unlikely.
  • If YOU would feel personally uncomfortable posting it on Twitter, don’t collect it without a very good reason. Again, for sensitive information, make sure you have a good reason for the collection in mind. On the other hand, Pew found general support (47% “acceptable,” 20% “it depends”) for the collection of grocery store buying habits. Why? It’s innocuous enough information and nothing too terrible would happen if your neighbors found out you’ve been spending half your paycheck on organic vegetables.
  • It’s about THEM and their legitimate concerns that data can leak out. Data hacks are in the news every week. So even though YOU may feel supreme confidence in your data security, THEY may not. Especially if they’re uncomfortable about those with whom you’re sharing their information. And their concerns aren’t always about criminals or foreign hackers. When respondents were asked if they would share just their name and a photo with old high school classmates, a mere 33% found such collection “acceptable” and 15% said “it depends.”

It is fitting that in the so-called “sharing economy,” we are collaboratively redrawing the parameters of privacy. This process is a type of assent through participation; there are relatively few instances of obligatory participation in a service or software that collects (and could compromise) your personal information.

But it’s difficult to monitor the scale of data collection when the details are obscured in Terms and Conditions sections that read like War and Peace. Organizations that articulate the limits – and intent – of their data programs will enjoy not only higher engagement, but better reputation about privacy among consumers. And that’s important, because they’ve got plenty of options.