Why Pseudonymization is a Red Herring …

red_herring

The company eCommerce system shows that we’ve made eleven sales today:

  • This                  4 sales
  • That                 3 sales
  • Other               4 sales

We can’t say much more. Useful facts, but not much insight.

 

Unless we know Who bought What. This is a game changer:

  • Albert, Betty, Charlie, Debra                   bought                  This
  • Albert, Betty, Charlie, Edward                 bought                  That
  • Charlie, Edward, Flo                              bought                  Other

 

Now we get additional Facts:

  • Charlie is our best customer                   (we’ll look after him, but how?)
  • Debra and Flo are new customers         (how to encourage repeat sales?)

 

We can re-arrange these Facts to deliver Insights:

Identity

Pseudonym

Bought

Also bought

Albert

A

This

That

Betty

B

This

That

Charlie

C

This

That, Other

Debra

D

This

Edward

E

That

Other

Flo

F

Other

 

Now we can confidently make some selling-up recommendations:

  • To Debra                              “people who bought This also bought That”
  • To Flo                                    “people who bought Other also bought That”
  • To Edward                           “people who bought That also bought This”
  • To Albert and Betty            “introductory offer on Other”
  • To Charlie                             “free delivery on your next Order of two products”

 

These are powerful insights. And although the recommendations are about products, they rely 100% on the ability to analyse Who bought What.

We can do the analysis using either the Identity or the Pseudonym – it really doesn’t matter which.

But from the legal point of view, we have simply got to have the Customer’s permission to do analyses based on Personally Identifiable Information (PII).

Pseudonymization is a Red Herring – you still need the Customer’s permission to analyse Who bought What.

The alternatives?

  • Missing out on all the insights.
  • Or – for international businesses that sell to Customers in the EU – fines of up to 4% of global Turnover, starting May 2018.

So go Legal, get Permission.

 

 

Red Herring:

  • a dried herring, turned red by the process of smoking it.
  • something that misleads or distracts from the most important issue
    [origin: from the practice of using smoked herring when training hounds to follow a scent]

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