Privacy vs. Convenience: What is the tradeoff?

Convenience seems to be the priority in this digital age. We consider ourselves savvy about our privacy, but do we recognize the boundaries?  We are quick to sign up for the “shoppers club” at the local supermarket. Most of us do not read the fine print on the terms and conditions; we are anxious for our pennies off of each item. We find that the trade off of allowing a grocer to track our purchasing habits is worth the convenience or benefit of a reduced price for those goods.

We are more suspicious of online activities. Only the most inexperienced of internet users sign up for “free trials” or ploys to capture an email address. However, even people for whom being online is a daily activity are probably not as savvy about the constant tracking and user data that is collected by search engines.

When do privacy concerns outweigh convenience?  In the NY Times last week there was an interesting article You’re Leaving a Digital Trail. What About Privacy?

Researchers at MIT are conducting an experiment where about 100 students have traded some of their privacy for a Smartphone.  In addition to individual student activities, these phones capture the dorm’s social network.  To a student, the benefit of a Smartphone is worth the tradeoff in privacy.

What about other types of data or private histories? Would you be willing to participate in a program where your bank would use your financial transaction history to provide you with tools to better meet your financial goals?  I don’t mean long term investment strategy, but rather day to day expense management advice and direction.  I expect for some, that is a very compelling proposition.

What about the electronic version of “keeping up with the Jones?”  What if you could share transactional information with your social network?  What benefits could be derived from knowing how your friends transact?  I can see how a household budget may benefit if you knew how your peers shopped for goods or were aware of available discounts.

Are consumers willing to share information to provide a better service experience?  Imagine if you could contact your financial institution and know that the employee who is going to assist you knows your likes, dislikes, and preferences on how you prefer to receive service.  Would you be willing to share more information to continue that personal type of relationship?

I think the future of customer service will require a greater amount of information sharing, and that consumers will find that the convenience and benefits will be worth it.

What other things would you be willing to share in terms of privacy in order to receive convenience or benefits?