Geeks and Shrinks

May 6, 2008

Trust and information sharing

Filed under: Email list rental, Reputation — Tags: , , , , — rvenkate @ 12:09 pm

JP wrote about trust a short while ago, from the perspective of transmission of information, particularly when the ownership aspect isn’t clear. However, there’s another aspect of information ownership that wasn’t in scope for his post, which is that the trust relationship that he refers to also grants license to use that information only for specific purposes (which may or may not include transmission).

One example that comes to mind is the usage of email address information. Clearly, directly selling the contact information falls into the territory that JP referred to. However, what about the usage of that information without actually passing it on? For instance, many of our customers send advertisements to subscribers on behalf of third parties (aka “list rental”). They don’t pass the contact information on to those third parties; they just enable communications. It could go even further, combining all available information sources for more precise targeting.

The key is to remember that building a reputation is expensive in time, money, or both. Regardless of the legal contract (or absence thereof) under which the information is collected, the short-term gains of selling the information are usually small compared to the acquisition cost of new customers (or new employees, new suppliers, etc.) with a tarnished brand. Without considering both aspects, it’s not possible to determine the NPV of an initiative.

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