The Customer Fishbowl: Strategic Approaches to Customer Privacy

Abstract

Customers are living in a fish bowl, where they are open to regular personal information surveillance by firms that threatens their privacy. This customer surveillance includes the collection, usage, and storage of customers’ personal information, such as for example personal identification details, consumption habits, and financial data. Due to advances in digital technology (e.g., optical scanners, location-tracking devices, computerized databases, web crawlers), one or more firms are often tracking the consumption decisions and behaviour of customers. Firms face a struggle to maintain the delicate balance between customer personal information surveillance and protecting the customer-firm relationship. In the short term, a firm is compelled to seek personal information from its customers in order to construct more attractive market offerings that enable a competitive edge against competitors. However in the long-term the implications of a surveillance activity by a firm may bring a negative reputation among customers and thus may decrease the attractiveness of that firm’s goods. Therefore firms need to manage their customer surveillance activity in a way that protects customer privacy. This article seeks understanding of how firms view customer privacy and how it is currently managed using in-depth interviews with 25 key managers in a large financial services firm. In doing so, it proposes a typology of customer privacy strategies and offers implications for practice and further academic study.