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Paying Customers for Personal Data: How Far Should CEOs Go?

Capturing actionable data about customers and prospects can help companies achieve the holy grail of marketing—sending the right message to the right customer at the right time. But one company—John Hancock Insurance—has stretched the bar a little farther in achievement of that goal, and its new initiative will catch the attention of CEOs in many industries.

Earlier this month, the Boston-based firm announced the availability in the U.S. market of a new program in which life-insurance policyholders can earn airline-style “points” by volunteering to share specific, personal information with the insurance company about how they’re living, including health data and lifestyle habits. JHI follows in the footsteps of Vitality Insurance, which has been using this approach in non-U.S markets for some time.

“The implications of paying for data could be broad as it nudges American consumers and companies further down the slippery slope of privacy depravation, where the descent seems to be accelerating daily.”

Americans who sign up for John Hancock’s offer will receive a free Fitbit (exercise) monitor that can be set to automatically upload information to John Hancock about activity levels, according to The New York Times. The most active customers may earn a discount of up to 15% on their premiums, as well as Amazon gift cards, half-price stays at Hyatt hotels and other perks.

Will the idea work? Even though car insurers have similarly swapped premium discounts for information about customers’ driving habits for some time, this move has unique implications for life-insurance companies, for which sales have slumped badly in the United States. “It has been a slow to no-growth industry for a long time,” John Hancock Insurance President Michael Doughty told the Times. “It is crying out for innovation and for someone to try to reinvent the product to make it more relevant.”

These far-reaching implications could include insurers partnering with companies it has never considered a partner before, such as providers of sportswear and wellness products. What type of data would enable your company to secure a partner you have been trying to secure without luck? Or would enable you to raise your partner fees? Or looking at the reverse, what would you give away to a partner who could provide you with ‘holy grail’ customer information for your business?

But the implications could be much broader as well, as it nudges American consumers and companies just a little bit further down the slippery slope of privacy depravation, where the descent seems to be accelerating every day.

“All of a sudden, everything you do and everything you eat, depending on which bits of information they collect, is sitting in someone’s database,” Anna Slomovic, lead research scientist at the Cyber Security Policy and Research Institute at George Washington University, told the Times.

Companies of all types and sizes will be watching this new foray into customer data collection for the first sign of positive results and/or fallout so they can learn from everything John Hancock did right, as well as everything it did wrong. Either way, there will likely be more case studies of this nature in the future.


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