Self-Regulate or Die

Jan 14, 2008 11:44 PM  By

Imagine a world in which no transactional data can be rented or shared unless customers have given express written consent.

Sound crazy? Well, it could happen. Last year, over a dozen states considered bills to restrict unsolicited mail and various forms of information sharing. And the Direct Marketing Association is expecting roughly twice that number to mull the issue this year.

Your list management income and business will be in jeopardy if even one of these bills becomes law.

Don’t believe me? Ask your accountant or list manager.

Renting names to pre-screened third parties is a profitable endeavor. Your revenue and company value will decline if this is curtailed or banned.

And how about those cooperative databases? Now would be a good time to ask the co-ops how they intend to serve you if data sharing regulations are enacted. Consumer catalog companies and retailers are at particular risk if the prevailing political winds blow the wrong direction.

But don’t panic. You can self-regulate right now.

There’s still time to ask your customers’ permission to rent their names or put them in a cooperative database.

Don’t be surprised if most choose to opt in, as one of our high-profile catalog clients discovered over 10 years ago. That firm asked permission via first-class mail before considering a change in their “we will never rent, sell, or share your name” policy.

Above all, give consumers control over how their transactional information may be used. They’re more likely to let you share this data with affiliates or outside companies if you have delivered value.

And ask consumers to opt in for all channels, not just the online ones. Opt-in names command a premium on the rental market.

Have you ever wondered about companies that claim they will never sell or share customer information? That promise defies credibility.

Consumers know a lot of data sharing goes on, with and without their knowledge. What happens to the customer list when a business is sold? It’s best to tell them before they ask.

A handful of visionary catalog and financial services companies have pursued consumer-friendly privacy practices for years—long before the government and privacy advocates got on the case.

The ultimate sanction when a breach of trust occurs is “loss of consortium.” It’s hard enough to replace unhappy customers who leave. But how do you undo the damage created when they tell others about their misfortune?

The Direct Marketing Association has long championed self-regulation. Bu most direct marketers are not members of the DMA and are therefore not subject to its guidelines.

The DMA needs to recruit new members to help support its mission to keep direct marketing and data sharing lawful in all 50 states.

The bottom line is this: If you fail to regulate yourself, the government will do it for you.

David Kanter is CEO of Laguna Woods, CA-based list firm AccuList.