A Zip Code Is A Terrible Thing To Waste

This month, a California judge ruled that retail firms are no longer allowed to request a credit card holder’s zip code at the purchase point. The plaintiff’s argument was that a customer’s zip code information is not pertinent to the credit card transaction, so asking for it merely amounts to a violation of the customer’s privacy. Here’s the story:

California Credit Zip Code Ruling

Of course, this lawsuit reflects consumer-rights advocates’ ongoing concerns about consumer privacy issues. While privacy is an extremely important concern that deserves ongoing study, this particular battle of the privacy wars was fought on the wrong grounds. The truth is, database marketers already have a veritable treasure trove of information about each and every consumer in the marketplace who has lived at the same address for more than a few months. The data available on all of us goes well beyond the zip code – so much so that most privacy advocates would probably sleep better at night not knowing what marketers already know about them, their neighbors – all of us.

From a B2C marketer’s perspective, knowing more about prospective targets of a planned marketing campaign actually allows everyone to win: the more targeted an individual contact, piece of collateral, or ad is, the better the chances that those who see or hear it will be open to hearing about how it can make their lives better. In other words: more knowledge on the part of the marketer means more precise targeting – which means a potentially happier prospect who has to sort through less “junk” to get to stuff they may actually care about. And, of course, the seller/purveyor of the marketing information is better off because she is focusing her marketing budget on those prospects who are 3-10 times more likely to respond than the average prospect. Spending less money on marketing and advertising can translate to bigger profits for the seller, a lower price for the buyer, or both. Truly win-win.

Ultimately, consumer privacy is an important issue that deserves ongoing debate and attention. But, court battles such as the one highlighted above show that the average consumer does not have the faintest conception of how far marketing has come in terms of depth of knowledge about end users that marketers already possess about them. And, most also fail to understand how targeted marketing can benefit everyone involved in the marketing equation.