Navigating the Big Data Minefield

Raj Samani ,of McAfee EMEA, reveals how small businesses can avoid getting into ‘big’ trouble

Navigating the Big Data Minefield

With smartphone usage consistently soaring, along with the rise of social media and the eruption of a whole host of additional functionality including QR codes, Near Field Communication technologies, online payments and even simple web browsing, 90% of the world’s data has been collected in the last two years alone – 2.5 quintillion bytes a day to be precise! The term Big Data has arisen in recent years to describe the collection and analysis of interactions across these multiple platforms.

This is great news for businesses – greater access to customer data means a greater understanding of customer behaviour and preferences and, as such, companies can begin tailoring products and services to appeal to the right audience.

However, Big Data in marketing is a double-edged sword. While some customers are happy to receive a more personal touch from online businesses, others feel a little uneasy at the idea of their data and online interactions coming under close scrutiny.

Yet this is not putting off big brands – worldwide spending on enterprise software, including tools to analyse Big Data is predicted to grow by 6.4% this year to $304 billion, according to analyst firm Gartner. Executed correctly, Big Data analysis can lead to increased custom and less time wasted with generic marketing campaigns.

However, there is a thin line between targeted offers that customers appreciate receiving, and simply being ‘creepy’. It is of course more difficult for small business owners to get the right balance than well-established corporates. Small businesses need to take caution when navigating this minefield, or risk having their online businesses boycotted by angry customers – or worse, face hefty fines.

So what are the dos and don’ts of Big Data for small businesses?

Smart cookies

One of the key ways that online companies are able to track customer online behaviour is through using cookies. Web cookies are text-based files that are stored within a web-browser’s computer when they visit a website. They enable websites to track browser habits, such as logging in, clicking particular buttons and viewing specific pages.

With this sort of information, website owners are able to assess the areas of the site that are of interest to specific users and keep track of their browsing behaviour for the future. Consequently, when users access the site again, the website will remember where they left off, including certain theme selections, preferences, shopping basket activity and other customisation functions.

This is of course a sensitive issue and there are legal guidelines that websites must follow before collecting information through cookies. The EU Directive, first established in May 2011 and fully implemented in the UK the following year, insists that website owners inform users about what cookies they use. In addition, the online business owner must have an ‘opt-in’ function on their site, so that users can agree to the use of cookies every time they enter the site. Failure to do so can lead to a fine of up to £500,000.

Email marketing

In addition to tracking customer behaviour online, it can also be extremely beneficial to collect customer contact details – particularly email addresses.

Armed with this information, business owners are able to develop email marketing campaigns and drum up business by keeping customers up-to-date through online newsletters.

The simplest and most transparent way of doing this is simply to ask visitors to enter their email address, so that they can receive updates of the business’s products and services. However this method is not necessarily the most effective.

Other methods include asking visitors to sign up for updates and newsletters in exchange for a prize or giveaway. This still allows SMEs to be open and honest with their customers, but at least gives the visitor an incentive to hand over their email addresses.

With customers increasingly shopping on the internet, or signing into online services however, contact details are also obtained in other ways. SMEs can use these details to send marketing emails, but it is important that they practice caution when doing so.

Businesses must ensure that they offer customers the opportunity to opt-out of marketing emails when they enter their details for other purposes and for those that miss this opportunity, opt-out options must be supplied with each subsequent message.

Moreover, before collecting customer details in any of these ways, it is important that businesses update their privacy terms, informing customers how they intend to use the information they have gathered.

The Information Commissioner’s Office (ICO) lays out guidelines that must be adhered to, which include ensuring that the recipients of such emails can clearly see who has sent the message, and as such small business owners should read these guidelines carefully before engaging in any of these practices. As long as these are adhered to, small business owners can feel safe in the knowledge that they are not treading into murky water with customer data collection.

One practice, which is a definite no-go area, is the purchase of email addresses from illegal sources. This may seem obvious to many small business owners, but while researching for my whitepaper ‘Cybercrime Exposed’, I discovered that this practice is much more widespread than originally thought.

Illegally sourced email addresses are increasingly accessible, as hackers are brazen enough to advertise their services in open platforms such as Twitter. In one instance, McAfee found a cybercriminal advertising the sale of email addresses for 500,000 individuals for as little as £3.49.

With these services promoted in much the same way as legitimate online trades, SMEs can easily mistake this for a legal practice. It is critical that they do not fall into this trap, and risk receiving business-damaging fines, as well as an angry backlash from victims of spam emails.

Keeping out of the Big Data grey area

Small businesses already struggle to compete with their larger counterparts online, as big corporates have the tools and resources to invest in complex data collection and analysis services. There are actions that SMEs can take to reap the benefits of Big Data, but it is critical that they stay out of the grey area and keep a clear idea of the guidelines.

Aside from analysing data and understanding what customers want, the most important way to keep customers happy is to gain their trust. Running a secure website, that protects customers’ sensitive data, is the key to obtaining this trust and becoming a business that they would recommend to their friends.

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