Collecting data for market research and using it for direct marketing

Silent calls face higher penalties  I found this news piece and thought it was interesting for CIM market research students, in particular those who are studying for the June 2011 paper.

One of the tasks is around the ethical and market research code of conduct issues involved in using the contact details of respondents to a market research activity, to make a database for future communications activities. In short, the fine line between marketing research and direct marketing.

Silent calls isn’t the first thing that comes to mind when thinking about this but it did make me think a bit broader in terms of the telephone preference service  and opt-in/ opt-out, in general.  Opt-in/ opt-out is a sticky area and on law firm Pinsent Masons’ website Out-Law.com this is discussed:

“An ‘opt-in’ generally refers to a tick box which, if filled in by the user, indicates positively that they would like to be contacted by a particular form of communication. Unless the user ticks the box then the organisation cannot use their details for the form of marketing listed.

“This is in contrast with an ‘opt-out’, where the default position is that the user will be contacted by that form of marketing, unless they tickthe box to indicate that they would prefer not to be. The benefits of opt-out over opt-in are clear – where the default position presumes the right to market, and requires no further action by the recipient, average collection rates are considerably higher, meaning more emails can be sent to more people”.

However according to the ESOMAR code of conduct, information collected for market research cannot be used for developing direct marketing databases. I believe this is the case even with an opt-out of direct marketing option. This is certainly an area I think needs some clarity from the regulators. 

The key principle:

The key principle with any market research is transparency. You must make it clear what you are using the research for and that you will use the respondents’ details for research purposes and not for direct marketing.  As such, using a questionnaire or focus group to build a database, as suggested in this CIM task, cannot be described as market research and doing it is unethical and would result in breeches of the ESOMAR code of conduct.  If you intend to use data collected via research for marketing, you must declare this, and not badge your exercise as research- call it as it is and you should find yourself on the right side of the law.

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One thought on “Collecting data for market research and using it for direct marketing

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