The Enigma

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Sunday, August 12, 2007

Selling your Customers...

Every large or medium scale services company has a loyal base of customers, and for god's sake, there are a billion services outside IT Services, so please do not assume customers to be mega firms here!

Imagine a locality or a town or a village being served by a firm. Now, that firm would automatically want to stretch its revenues and looks for all avenues to boost them! In that regard, can it collect the info of its customers and sell it to interested firms?

Suppose a firm A owns a cattle farm and provides daily milk to an entire village V. Now, can A ask every interested family in V to fill a form giving out contact and demographic details, compile that data and sell it to banks or other interested firms?

This is seemingly an easy task, but what if later families of V sue A? What are the legalities involved in this sort of data collection? Can such data whose intention of collection is not divulged at the time of collection be sold at free-will? I have not come across any law that curbs such acts, but I dont feel it ethical to do so. If you know of any law, please do tell me and if u just feel something about it, let me know!

The most important point that hits me is, in case it is legal to do all this, should A inform residents of V of its intentions beforehand? Also, in this age of protecting consumer privacy, are there any legislations anticipated in this regard?

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At August 12, 2007 12:44 PM, Blogger Puru said...

This comment has been removed by the author.

At August 12, 2007 12:52 PM, Blogger Puru said...

Thanks for the invitation.

Have you come across the concept of "Permission Marketing" by Seth Godin? That concept is indirectly applicable to the question that you have posed.

More so, there is a privacy policy of every company, where it mentions if it uses its customer data for commercial purposes. If you want to use the data of your customers, you can just mention during the registration process that the data provided would be given to other partner organizations for commercial purpose.

In that case, customers have been sensitized with the situation, and they would accordingly fill in the requisite data.

Finally, as for the legalities - it is derived from the privacy policy.

Incidentally, there was a nice article in HBR sometime back on this topic. It would give you good insights in this regard.

All the best!

At August 15, 2007 11:30 PM, Blogger Kabali said...

dude ... how bout askin this to your Biz law prof??? :P

At August 15, 2007 11:35 PM, Blogger Kabali said...

On a serious note, I believe though the Firm A, in your example will not be sued due to humanitarian considerations, this is quite possible ...

I myself am quite a follower of the legalities of various biz axns. ... this I believe is a serious issue ... I bet you would have seen companies seeking such information, having a Terms of Service ... stating that they would not reveal such info at any cost ...

This is legally not allowed and the same law which holds banks from revealing customer information ... binds this case too ...

But you still receive a number of calls from companies, consultants, etc. Just a clear breach of this law. But nowadays you give your details in a lotsa places and its very difficult to track the source :(


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