Illegal Use of Personal Data for Advertising

Subject: Business Ethics
Pages: 1
Words: 304
Reading time:
2 min
Study level: College

People can stumble upon ads for buying and selling customer databases of various organizations on specialized forums and just with a regular search on the Internet. Banks and state institutions do this, as Internet companies, financial institutions and small private firms do. However, by selling customers’ personal information, organizations risk losing the trust and loyalty of people.

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In the context of increased competition and accelerated dynamics in the market, the goals of many companies have changed significantly. A few years ago, the critical task of the marketing strategy was to win a new clientele. Recently, the focus has been on the problem of retaining customers and maintaining long-term mutually beneficial relationships with them. Katherine Lemon claims that the illegal use of personal data can lead to a massive outflow of customers (Davenport et al., 2007). In my opinion, this is a negative effect, which can even cancel the profit received for this data sale. The number of lost clients can grow several times over time. In this case, the organization’s losses will be greater than when brought to administrative or criminal responsibility (Davenport, 2006). The formation of consumer loyalty provides the company with significant additional profits from regular purchases. They, in turn, are based on a high emotional commitment to your favorite brand, which will disappear along with loyalty.

Loyal consumers are companies’ most important strategic asset and the key to their success in the future. Disclosure of the client’s data may cause its decline and, as a result, a sharp outflow of consumers. The sale of confidential customer data can reduce the frequency and regularity of purchases, breaking the level of consumer interaction with the company. The client’s dissatisfaction and willingness to give negative recommendations caused by the sale of personal data can have an extremely detrimental effect on the company’s financial situation.

References

Davenport, T., & Harris, J. G. (2007). The dark side of customer analytics. Harvard Business Review, n.d., 1-10.

Davenport, T. (2006). Competing on analytics. Harvard Business Review, n.d., 1-10.