Regulation of Marketing Information Management Video

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  • 0:01 Customer Data
  • 0:53 Why Companies Care
  • 1:27 The Market for Data
  • 3:05 Keeping Your…
  • 4:08 Lesson Summary
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Lesson Transcript
Instructor: Kevin Newton

Kevin has edited encyclopedias, taught middle and high school history, and has a master's degree in Islamic law.

Companies have a vast amount of information available on you. In this lesson, we look at how marketing information management works, how much companies really do know about you, and how they manage that information.

Customer Data

Do you have a grocery store loyalty card? Or maybe you get asked for your zip code or phone number when you buy clothes at your favorite store? Sure, they may offer to send you a coupon, or keep you informed about new sales, but in reality, retailers are actually looking for a way to make more money from you. That's right! In the age of big data, little is as big as the information that can be gathered about consumers.

It's similar to the fact that many ads you see on web sites seem to be targeted to what you're interested in but is much more all encompassing. It's even why you get junk mail that seems to be targeted to your income and education levels. All of this information requires a bit of marketing information management, or how companies buy, sell and protect all their information on a client. It also requires significant amounts of regulation.

Why Companies Care

If you thought that your favorite cute clothes company existed solely to make you happy, you couldn't be more wrong. In reality, companies exist for one reason: to make money. That in and of itself is not a bad thing and a great deal of good has come as a result of companies trying to make as much money as possible. However, the key to making more money is to have as much knowledge about your customers as possible. After all, if you find out that a client has recently had a child, you're only doing them a favor by stating that your company offers clothes for infants, right?

The Market for Data

The market for data on customers is massive. How big? While it's still very secretive, the going rate for a basic profile, which includes where you live and a rough idea of your tastes, is around a dime ($.10). While that doesn't sound like much, the truth is that for more detailed information, companies are willing to pay much more. Companies that gather information for banks looking to offer certain types of loans can get paid as much as $100 by the bank for giving them the information of a potential client.

On a more mundane level, every time you give a retailer your zip code, you're giving them valuable demographic information. If they notice that a lot of their customers live in a given zip, it may be worth opening a new store or at least doing a publicity drive in that area. That's all low level information. For the most part, people are accepting of that sort of action by customers.

But what about selling your individual information? This is very common among political groups, as they routinely buy, sell and trade information between like-minded groups. Money is power in politics and those who contribute to political campaigns often have to work hard to keep their information from being sold to affiliated groups. After all, if you give money to one party, wouldn't you be likely to give money to their affiliated groups?

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