Can ‘privacy’ be a convincing marketing proposition for premium pricing?

One side of the privacy argument:

“People today are rightly concerned about how their information is used and shared, yet they all define privacy in their own ways. We’ve stayed focused on the products and features that make privacy a reality — for everyone. “For everyone” is our core philosophy. For us, that means privacy cannot be a luxury good offered only to people who can afford to buy premium products and services. Privacy must be equally available to everyone in the world. To make privacy real, we give you clear, meaningful choices around your data. All while staying true to two unequivocal policies: that we will never sell any personal information to third parties; and that you get to decide how your information is used.”

Source: The New York Times

Another side of the privacy argument:

“We could make a ton of money if our customer was our product. We’ve elected not to do that. You are not our product, you are our customer, you are a jewel.”

Source: Recode

Since I have removed the company names, you could guess who said what. If you couldn’t, allow me to help: the first one is from a guest article by Google’s Sundar Pichai, while the second is from an interview with Tim Cook, by MSNBC’s Chris Hayes and Recode’s Kara Swisher.

Google wants to make broadly accessible and affordable products and services for everyone that uses your data to make those products and services contextually useful.
Apple wants to make not-so-affordable products but offer ‘privacy’ in those products and services as a USP.

And Apple is taking swipes at Google even in the form of outdoor advertising, and these are clearly meant for consumer users, to convince them about the premium one need to pay if they value their privacy and want their data to be safe.

Photographer: David Paul Morris/Bloomberg

But is privacy, as understood by a majority of people, a premium product?

With or without Google or Apple products, today you can name search almost anyone and find a LOT of personal information. This includes email IDs and even phone numbers (via Truecaller). For context, our landline phone numbers were available too freely, via yellow pages, back on those days.

I have long felt that that only 2 people who do not need a smartphone are an extremely poor person (because he/she cannot afford one) and an extremely rich person (because he/she can have an army of people reading messages and taking calls on their behalf). The majority of the world fall in the middle.

We all need to use free email, free maps (almost indispensable), free search engines, and we do it in largely affordable smartphones. The oft-repeated saying goes, ‘When something is free, you, the user, are the product being sold’. It sounds ominous, as if the keys to your owned home is being given away, but in reality it may not be like that.

At present, lack of privacy amounts to things we are all familiar with:

  • you search for something and that product listing follows you on multiple sites
  • you enter a destination in the map, and it may ask you if you want directions from a location you often start from (may be your home)
  • intrusive, unsolicited calls for loans, donation, credit cards etc.

Are we ok with all these? Largely – they are being understood by us as the price to pay for getting free services.

When we hear someone say, ‘They sell your data’, we almost understand it as the above 3 (or its variant). We don’t understand it as, ‘someone knows our online banking password’ and don’t press the panic button anymore.

In this scenario and conditioning, does selling privacy as USP, for a premium, work as a marketing narrative?

For instance, if a new bank starts tomorrow and said, ‘We value your privacy. We will never sell or share any of your data. We will charge 25% more for our services to ensure that we are able to adhere to this policy’, will you prefer them?

Would you not say, about your bank, ‘But you are NOT supposed to sell my data anyway. Are you doing it? Because this new bank is saying they won’t and is charging a premium. Why are you cheap and what are you hiding?’.

‘Not selling our data’ is a basic expectation. But most commercial establishments do sell our data. What kind of data? Email IDs, phone numbers, search phrases (anonymized), browser cookies etc. The data does not include our passwords stored on the browser.

Given our fluid and limited understanding of ‘privacy’, can it really be a compelling/convincing marketing proposition, particularly for premium pricing?