In the summer of 1996 I presented a series on CBC Radio’s Island Morning program, produced by Ann Thurlow, called Consumed by Technology. I’ve managed to recover the audio of the episodes, along with the “show notes” and transcripts, from The Internet Archive and I’m posting each episode here for posterity.

This first fifth of Consumed by Technology focused on information privacy and the use of unique ID numbers by companies to track consumers; it aired on August 6, 1996. Karen Mair was the host.

Have you ever had a day where you’ve felt more like a number than a real person? Telephone numbers, calling card numbers, bank account numbers, bank machine numbers, credit card numbers… sometimes it seems impossible to do anything these days without one number or another.

Transcript

INTRO: Have you ever had a day where you’ve felt more like a number than a real person? Telephone numbers, calling card numbers, bank account numbers, bank machine numbers, credit card numbers… sometimes it seems impossible to do anything these days without one number or another.

In another in the series “Consumed by Technology,” Peter Rukavina joins me now to talk about all of these numbers, what they’re used for, and why you might just want to think twice the next time you’re asked for one of them.

QUESTION: So what about all these numbers…?

ANSWER: Last week we talked about the kind of information that governments record about us and what they do with it. This week I’d like to concentrate on how businesses keep track of us… and that’s where all these numbers come into play.

As you suggested, these days it seems like you need a number to do most anything: to get money from a bank machine you need your bank card, to rent a video you need a video rental card, to go to the hospital you need your hospital card.

All of these cards have numbers on them, and often its these numbers that seem most important to businesses.

In a very real sense, to whatever business or organization is looking for whatever number they need, you are your number.

Try calling up the bank and saying “Hi, it’s Peter here… can you tell me my balance please?” What’s the first question they’ll ask…?

QUESTION: “What’s your account number?”

ANSWER: Exactly. Now of course the real reason for all of these numbers has nothing to do with people at all and an awful lot to do with computers.

If you’re writing a computer program to keep track of customers, you want to make sure that all the information that gets entered into the program gets “lined up” with the right person’s record. If I make a payment on my credit card, for example, it’s important that that payment gets subtracted from my balance, not from the balance of some other Peter Rukavina.

Using numbers as the “key” for a customer database — as the way to call up any person’s record — is an easy way for computers to make this happen.

Now if this doesn’t seem like a particularly new concept, you’re right… businesses and organizations have been using numbers to keep track of us since before there were computers to make the job easier.

But what is new and different in the 1990s is what businesses are doing with these numbers — and more importantly what they’re doing with the personal information about us that these numbers are tied to.

QUESTION: What are they doing with our information?

ANSWER: Businesses call what they’re doing by odd-sounding names like “establishing client intimacy,” “relationship marketing,” or “demographic profiling,” but what it all comes down to is that businesses are using the same ability of computers to record personal information about us that they’ve been using for years, but they’re starting to gather more and more information and to look at the patterns contained in that information to try and “figure us out” and, in the end, to sell us more stuff.

QUESTION: What do you mean by “figure us out?”

ANSWER: Let’s take an example: over the past couple of years, a lot of retail stores have launched some variation of the “customer loyalty card” — the Club Z Card, the Petro Points Card, whatever. Usually you sign up for a card and then every time you purchase something you get points which, after a while, you can redeem for “free stuff.”

Now on the surface, these cards are simply a way for these businesses to keep you coming back again and again to their store. And that’s a large part of what they’re good for: they do, indeed, help to build “customer loyalty.”

But remember that every time you use one of these cards, a record of it goes into the store’s computer. Buy ten rolls of toilet paper on July 13… it’s in there. Go back on July 17 and buy 20 feet of garden hose… it’s in there too. It’s no longer just a “what” that get recorded in the store’s computer, but a “who” as well.

Purchase by purchase, this information isn’t remarkable. But taken as a whole, over time, it can be very valuable to businesses.

QUESTION: What use do businesses make of this sort of information?

ANSWER: They can use it two ways.

Firstly, they can look at broad patterns of who’s buying what. Remember that before this sort of card came along, stores could tell what was selling well, but not who was buying it.

It used to be that if I came in on Monday and bought a some toilet paper and then came in Tuesday and bought some cat food, the store would never know that it was actually me making both of those purchases.

Now that they can tell that it’s me, they can answer all sorts of new questions.

It’s one thing to know that you’ve sold 20,000 rolls of toilet paper in July, another thing altogether to know that three quarters of the people who buy toilet paper at your store also buy their shampoo from you every week. And that half of those people prefer a certain brand of shampoo.

This kind of information, used properly, can be like gold to a retailer because it helps them know more about who their customers are and what they’re buying… it helps them “figure their customers out” as a broad group. And, in the end, to market more effectively… and to sell more stuff.

The second way that businesses can use the personal information they have about us is a little more ominous, and it surrounds using information about our buying habits to try and “figure us out” as individuals.

If you’ve ever subscribed to a magazine and then, a couple of months later, started to get flooded with junk mail, then you’ve seen a primitive version of this in action. Magazines sell their mailing lists to companies who think that there’s a good chance that people who subscribe to that magazine will buy their products. Subscribe to Harrowsmith, you might start to get L.L. Bean catalogues in the mail. Subscribe to the Financial Post and you start to get mutual find mail.

QUESTION: So we’re not as much a number to them as a “the type of person that reads Harrowsmith?”

ANSWER: Right. Now what’s starting to happen now is that this practise is becoming something of a science.

Businesses are realizing that it’s a lot more efficient to send out, say, 100 catalogues to people who they know are going to buy something from them, than to send out 100,000 catalogues to people who they have a hunch might buy something from them.

And it’s in this process of moving from a list of “hunch”-people to a list of “sure thing”-people that businesses can make use all of this information they have about us.

Let’s say you go grocery shopping every week at the same store and that store has some method for keeping track of who you are and what you’re buying.

Over the course of a year — in fact probably over the course of a couple of months — that store is going to have a pretty good idea of what sort of products you buy from them. They’ll know that you buy 3 pounds of apples ever second trip, that you don’t ever buy canned juice, that you only buy flour when you buy sugar, that you just started to buy diapers in July. And so on. In that small space of life that has to do with grocery buying, they’ll probably end up knowing more about you than you know yourself.

Now think about all of the other things you buy and imagine a similar situation is in place. Your video rental store keeps track of the movies you’re renting, your clothing store knows when you buy clothes, the gas station knows what grade of gas you buy and when, your car dealer keeps track of how often you get your car serviced… almost everything we do in the marketplace has the potential to leave an electronic trail behind.

Now again, any of this information taken alone — the fact that I bought a bag of apples on Monday, for example — isn’t very useful to anyone. But, just like the “One Big Government Database” that we talked about last week, the real potential power of this information for business lies in combining this information about us with other information about us from other businesses and then using powerful computer programs to help to slot us all into a very narrow “demographic profile” — a sort of map of our lives based on what we buy.

Businesses can then turn around and use this demographic profile to hit us with very, very targeted and specific marketing messages.

QUESTION: So it’s no longer just getting L.L. Bean catalogues in the mail because I subscribe to Harrowsmith…

ANSWER: …it’s getting personalised coupons for cloth diapers in the mail because of three visits to a maternity clothing store in the past month combined with the fact that we just purchased a new washing machine.

It’s having my cable company give me a free month of TSN because I rent sports videos a couple of times a month and subscribe to the Hockey News.

It’s getting email from a drywall contractor because I bought five home renovation books at the local bookstore over the last two weeks.

There are not a lot of businesses taking things to this extent yet, but to get some idea of what a seasoned professional in the direct marketing game looks like, you only need to look as far as Readers Digest. Most people probably think that Readers Digest is just a magazine. And it is. But more than that its a huge database of marketing opportunities. With 15 million subscribers, Readers Digest has one of the largest and finely developed databases in the world. As they use the list, they learn more and more about the people on it and they use that information to market to those people even more. What Readers Digest — and the Columbia Record and Tape Club and the Book-of-the-Month Club and other veterans in this game — having been doing for years now is something which will become more and more common in many, many other, smaller businesses in years to come.

Standards for recording and sharing personal commercial information are being developed. Computers are getting smaller, faster, cheaper, and networked together. More and more of commerce is moving to mail order and the Internet and other electronic systems where gathering information is so much easier and more invisible. After using bank machines for a decade, we’re all starting to use debit cards more and more; “smart cards” that actually carry money around are on the way soon.

Taken together, the signs all suggest that whatever you want to call this “customer intimacy building” is only going to become more and popular and common.

QUESTION: Should we as consumers be wary of this?

ANSWER: It all depends on how you feel about your personal information. If you like receiving things in the mail, if you don’t care who knows what about you, if you don’t mind being slotted into a very narrow demographic group for marketing purposes, then the world is going your way.

If, however, you value your privacy, if you’re the kind of person who blanches at junk mail and values the kind of personal service that comes from being known as an actual real live human being and not a number with a demographic, then you’ve got something to be worried about.

And I say that in all seriousness; although I’d tend to put myself in the later group, there are a lot of people who see this trend as being a positive thing, as a giant leap forward for the science of marketing. And many of these people are consumers themselves.

QUESTION: What about the issue of privacy? Do we actually have any control for how all this personal information about is used?

ANSWER: The short answer is no.

A lot of privacy issues we take for granted: I can’t call up a department store, for example, and ask them how much you charged to your account last year because in most if not all cases, they consider that information confidential.

But by and large our privacy is not protected by legislation, but by tradition.

Industries that have been around for a while often have a “privacy code of conduct.” Most credit agencies, for example, will only reveal information about you to people who have your consent and will always let you look at your own file and will let you request that changes be made if they are warranted.

But other businesses, which haven’t really seen themselves as being in the information business until recently may very well think that whatever information they have on you is their property to do with as they see fit. And a business that would never consider giving out your name and address to a third party might not think twice about selling information about what you buy from them and when.

The best advice I can given anyone who is concerned about the privacy of their commercial personal information is to simply be extremely vigilant. Whenever a business asks you for information which would identify you, ask them what they want it for, how they’re going to store it, whether they consider it confidential and whether or not they’ll sell information about you to anyone else.

If their answer doesn’t satisfy you, don’t give them any information.

Of course it’s hard to be vigilant when everyone is looking for one number or another, especially when you live in a small place like PEI where you might not have any choice as to where to shop.

But short of legislation which places limits on the use of commercial personal information it’s really the only option we have.

What bothers me about this trend is really not as much a privacy issue as the notion that we’re quickly moving from a world where personal relationships are the core of the marketplace to a world where demographics and buying patterns and databases are the core. I’m no longer a thinking breathing person with a set of shopkeepers who know me and my needs, I’m a number attached to a file attached to a profile which sits in a computer in some far off place owned by people who think that this tells them who I am.

And that… makes me sad.

EXTRO: Peter Rukavina operates Digital Island in Kingston, PEI… he’ll be back next week with another in the series “Consumed by Technology.”