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Companies have been emerging that are actively following social media habits of users in order to gather buyer information to sell to companies.  Some people feel it’s a violation of privacy, other contend that it’s a public platform and that social media can be used to tailor services and products to a customer.

Is it really any different from Amazon recommending books to you based on what you’ve purchased in the past? I take the stance that if social media helps create a better experience all around, and companies are able to benefit from information they are not taking upon themselves to find out, then it’s fair game to sell the information.

For an organisation or company, a key factor in social media relations is to learn about your audience and buyers. Any social media marketer or organisation that utilises social media will tell you listening is the number one thing you do.  By listening to what “Suzie” has to say, you can reach out to her on a more personal level. The process of learning more and reaching out creates trust. Trust and a personal experience generally creates advocates. Make sense? If an organisation doesn’t have time to monitor all of their customers, why not have someone do it for you?

Mashable recently wrote a piece on how companies are using your social media data.

Rapleaf is one of the companies they mentioned. Rapleaf contends they help improve your customers’ experience:

Personal finance reporter Erica Sandberg, who covered the issue of social media datamining in a story for CreditCards.com, said that if a data mining company turns your chatter and network into a behavioral pattern, and if they can prove it has some worth, then it’s valuable to companies. Sandberg said this is just more information anyone can use to help them make a decision.

“I don’t think there’s anything scary about it,” she said. “Why wouldn’t they look at it? It’s public.” She said she is not aware of any specific examples of those who have been negatively impacted because of it.

Entities such as airlines, politicians, and even non-profits can use this data for finding new customers or targeting products to existing ones. Financial services companies such as banks and lenders are also using the same datamining services for marketing purposes and to make lending decisions.

Data mining by location is also something that can tell companies about the behaviour pattern of their customers. Dr. Katina Michael, Associate Professor of the School of Information Systems and Technology at the University of Wollongong, says:

“Location-based social networking applications can reveal a great deal about an individual’s patterns of behaviour. Beyond telling us ‘where’ someone has been, they can tell us ‘who’ someone has been with. The ‘where’ part of the equation allows us to overlay location details (x and y coordinates) with satellite imagery (maps) which effectively give a researcher a ‘context’ for an individual’s circumstances. E.g. a user can be pinpointed to a park, a cafe, a school, a commercial building, or otherwise. ‘Who’ someone is with tells us about their relationships, how they might interact with others, frequency, distance travelled, time of outings and even propensity to spend.”

How far is too far?

I had a friend tell me a story the other day. He checked into his location-based social network at a restaurant. He allowed it to go to Twitter.  A restaurant nearby, within the same area then sent him via Twitter, a coupon of some sort to have him stop by. So, the restaurant saw where he was, saw he was in the neighbourhood then proceeded to solicit him. How do you feel about this?  Do you think the soliciting restaurant was out of line, or do you think they were smart to have reached out to a potential customer?

posted by Venessa in the category Social Media Social networking
Tags: Amazon, Creditcards.com, Erica Sandberg, Katrina Michael, mashable, Rapleaf