The CIO Code of Ethical Data Management

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The problem is, marketers will do anything to avoid opt-in marketing. Statistics suggest that when personal data marketing becomes opt-in, more than nine out of 10 consumers will decline to join. If only 10 percent of the target market chooses to participate, the marketers are left with data that doesn’t tell them very much.

The Next Branding Trend

When CIOs do take a lead on data ethics, the results are positive. Gene Elias, CIO of Quiksilver, a surfwear clothing company based in Huntington Beach, Calif., that targets 9- to 15-year-old children, has taken this thinking to the extreme. Elias has prohibited sales and marketing from using any of the customer data he possesses?which amounts to personal information collected when people join mailing lists or become members at the Quiksilver website. He says the company doesn’t retain credit card numbers after transactions in Quiksilver stores, and all of his data ethics guidelines pass muster worldwide.

Clearly such limits set up an adversarial relationship between marketing, which stands to benefit greatly from collecting and repurposing data, and the CIO, who stands to lose his reputation over a privacy flap. "So far, knock on wood, marketing understands when I tell them there are pitfalls in doing certain things with data," says Saab’s Rode. "But it’s also helped to offer alternatives, instead of just being the ’no’ man."

One alternative suggested by Rode that has paid back is an online service called Saab-i. Rode makes sure it’s the ultimate opt-in?with absolutely no use of data without express consent of the consumers. In exchange for agreeing to be marketed to and have their data used in aggregate form, consumers obtain access to early notification of Saab promotions and can get their car questions answered. Rode says membership has doubled every year for three years.

Both Rode and Elias believe the next branding trend in the United States will be trust. Marketing opportunities lost will be made up through customer loyalty. Consumers will choose between vendors based on their policies around how ethically the company treats personal information, among other privacy litmus tests. And CIOs, they say, can play a crucial role in promoting this trend.

While Rode has developed formal rules on how to manage customer data, Elias admits that his are mostly informal. "If someone new came into marketing and I felt like they didn’t understand how I guard this data, I might change my tune, make the rules a little more formal because the relationship is not there," he says.

A Hippocratic Oath

It might work informally at Quiksilver, but as Mayo Clinic’s Cranmer notes, "not everyone has a strong sense of ethics." As a result, some CIOs say there needs to be a formal code of ethics or principles that lay out the CIO’s moral obligations when it comes to data. Such a doctrine is meant to help CIOs in a way that the Hippocratic oath guides doctors. The six commandments we have suggested on Page 58 address not only the issue of customer data but data retention and deletion as well, and the role that the CIO should play in communicating to the rest of the organization why such guidelines are crucial.

"If we have guidelines, it will help the CIO know where the line is," says Cranmer. "It would also allow CIOs to hold up a document that says, ’This is what I ascribe to.’"

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Copyright © 2002 IDG Communications, Inc.

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