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Barnes & Noble Will Have Only One Day To Let Borders’ Loyalty Customers Opt Out

September 28th, 2011

That’s a relatively simple site to set up if you’re dealing with a small number of customers. For dealing with potentially millions of customers, all of whom will be notified at the same time and who will be hammering on a database that’s new to the B&N IT staff, it’s a nightmare. In fact, just sending out 40-million-plus E-mails in a 24-hour period could get B&N flagged as a spammer by some E-mail systems.

Unfortunately, the Borders/B&N compromise may be a model for future handling of CRM data when big retailers go bankrupt. The data is too big an asset for bankruptcy courts to ignore, but bankruptcy law now includes specific provisions for protecting customer privacy, including appointing a Consumer Privacy Ombudsman. And the FTC will continue to push for opt-in, which CRM data buyers and bankruptcy judges are likely to reject as impractical.

On the other side, if the company buying the CRM data has its own strong and consistent privacy policy, that’s likely to sway bankruptcy judges in the direction of easing opt-in or opt-out requirements at least a little. The stronger the privacy policy—especially if the company buying the CRM data has a stronger policy than the bankrupt seller—the more likely a judge, ombudsman and even the FTC will be to trust the safety of the data. And the less that policy has changed, the more likely they’ll believe it will keep protecting acquired CRM data.

But going forward, quick-turnaround requirements for dealing with that CRM data are likely to be the rule, not the exception. If you’re on the acquiring end, that means you’ll want to clear the path as much as you can in advance.

Chances are that you won’t officially get your hands on that customer data until the deal closes. To send out millions of E-mails within one business day after that, it helps to know everything you can about the data you’re acquiring in advance. You’re not likely to get much help from the bankrupt company—its best database people will be long gone. But even knowing whether it’s an Oracle or DB2 or some more obscure database will help you plan. Full schema? That may be too much to hope for, but it’s not too much to ask for.

Getting that information in advance requires that you start the wheels turning as quickly as possible when you get an inkling that your company is buying a bankrupt competitor’s CRM data. You won’t know the state of that CRM data, its format, how well maintained it is or what tricky gimmicks are buried in a database that was never designed to be handed off to anyone else.

But one thing you can be sure of: Lawyers generally don’t know IT, so they’ll negotiate last-minute deals that solve their problems, but leave IT with the job of fulfilling the agreements they’ve made—like, say, a promise that 43 million customers in an unknown database will get E-mails offering a way for them to opt out overnight.


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