CSM CASE STUDY – 07/09/2021 - GROUP 4

1. Vương Nguyên Anh 1810530011

2. Nguyễn Thị Thanh Huyền 1815530027
3. Đỗ Ngọc Phượng 1815530045
4. Phạm Hương Giang 1815530020
5. Vi Thị Hồng Ánh 1815530012

Task 1: Decide whether Psi should update its standard information disclosures in response to
the customer backlash.

Although the information given by the company in its contracts is lawfully faultless, it remains
blocked off to the clients and in this way demonstrates incapable in communicating with the
customer. It is becoming apparent that the majority of Psi customers are not aware of the
company’s terms of service and privacy policy. Clients who were initially satisfied now feel
inundated by incessant targeted advertisement. Additionally, many users confess that they
have attempted to examine the privacy policy but gave up since it is too complicated. The
unreasonable gap between lawfulness and transparency is thus adding cost to business. So in
this case, Psi should revise and update its standard information disclosures in terms of service
and privacy policy, in response to the customer backlash and to rebuild customer trust. And to
limit the negative effect of aversion, which includes depriving the vital promotion channel, Psi
will have to modify parts of the B2B contracts which regulate third-party actions with the data it
is selling, with the specific intent of limiting the frequency of promotional campaigns Psi’s
customers receive. So, in this case, transparency is considered as the vital feature of contracting
with both B2C and B2B dimensions.

Task 2: Devise a plan for improving the transparency of Psi's terms of service and privacy
policy. Any such plan should be based on knowledge both of Psi customers' behavior during
contracting and of the state of the art of research on the subject of transparent disclosure.

*Psi’ customer behavior during contracting

- Customers tend to prefer to read texts that are easy to understand and concise. They
don't have enough knowledge of law and contract documents. They mainly only grasp
the basic regulations and indirectly through third parties. Therefore, almost Psi’
customers fail to understand regulations and terms in the contract of the company.
- In addition, the conclusion and performance of a contract is associated with risks, i.e.
uncertain events. Therefore, when Psi drafts a contract, it concludes that many
hypothetical situations must be given. This makes the sentences used to express always
 complicated, dense with specialized terms, making it difficult for customers to
understand and clearly know their rights and obligations.

*Comments on current terms of service and privacy policy of Psi in B2C contract
- Terms of service and Privacy Policy are both lengthy, containing 15 - 17 clauses per
article, 4 - 10 lines of text per clause.
- Jargons and legal languages (i.e. modal verbs, inversion, “whom” sentences, etc) are
used occasionally, making it difficult to understand and catch the core content of the
whole sentence or clause.
- The content of Terms of service and Privacy policy did not inform the customers on how
and on what purpose their information will be traded to the third parties (i.e. for
personalized advertisement). Rather, it was confusing between the use of data by Psi to
optimize their services to them with the use of a third party for reasons other than what
are included in the customer experience with Psi.

*Problems with transparency of terms of service and privacy policy of Psi in B2C contract
The current format and content of the Terms of service and Privacy policy are not matching.
Conflicts occur as:
- Customers prefer short and clear text, easy-to-understand language, and often want the
registration to be fast, meaning that they would barely read the Terms of service and
Privacy policy carefully;
- Yet the Terms of service and Privacy policy are long and abstract.
Thus, the transparency is low, as customer’s knowledge of Psi’s information confidentiality and
trading were from the advertisement of Psi rather than from reading the terms and policy upon
registration.

*Plan for improvement

- To improve the Terms of service and Privacy policy, it means that Psi would have to: (i)
plan for amendments; (ii) draft new terms and policy; (iii) re-implement; (iv) monitor
and (v) re-evaluate such changes.
- In the planning phase, in order to prepare for amendments, Psi should:
+ Research carefully the problem, communication, customer behavior and
language so as to create changes that will not modify the business model of Psi
(i.e. trading data as core revenue stream).
+ Plan the changes in the format of the contract: Some changes may be considered
as follows:
(1) Improve the organization of information with clearer headings and
subheadings
 (2) Highlights important contents and provide explanation to the legal terms
(jargons). Hyperlink or pop-up notes can be used.
+ Plan the changes in the content of the contract: This should include personnel
from the legal team, linguistic consultants and contract management team.
Some changes may be considered as follows:
(1) Re-examine the language used in the contract, remove all language which
creates uncertainty as to what happens to her clients’ personal data, so
that Psi’s practice of selling it to third parties regularly becomes evident.
(2) Shorten the Terms of service and Privacy policy in order to make the text
accessible and understandable to the widest possible audience
+ Consider the risk management of such changes: What risks may arise, how are
their impact on Psi, what inbuilt mitigation and contingency response does Psi
have in hand? A potential risk is as follows:
(1) Losing potential customer:
When the terms of service and privacy policy becomes transparent and
clear, customers are well-informed about their data being traded to a
third-party for other uses. This may demotivate new customers to use Psi
services, as well as reduce the retention rate of existing customers.
However, this risk is less impactful than the risk of harming brand trust
and creating a bad brand image resulting from maintaining a false sense
of security and privacy.

Task 3: Decide whether Psi can request a change to its existing B2B data brokerage
agreements based on the texts of the contracts themselves and the prevailing business
culture in the sector. If the request is possible, describe some of the risks it entails.

3.1. Decide whether Psi can request a change to its existing B2B data brokerage agreements
We will base on some factors to analyse why Psi should implement a change:

a. Operations and culture of the business

*Contract management (CM) process
- This is the consequence of executing B2B contracts: plan, draft, implement, monitor,
evaluate. Psi can improve the CM process to prepare better before signing the contract
with third parties. Some information has to be prepared: Market condition (price, price
trends, major cost element, market structure, degree of competition); third party
organization (financial, management capabilities, culture and style,..)
- Knowledge management is of utmost importance in the CM process because it is related
to terms of services, privacy policy, data brokerage contracts.
 - Board of directors and different departments in the company should be aware of
making required changes in data brokerage agreements with third parties. Psi internal
and external information flows will have to be subjected to much closer scrutiny and
evaluation in order to foresee and prevent any mishaps along the same lines.
- Through corporate management, information management, knowledge management,
Psi can improve the CM process to prepare good knowledge about the legality about
terms of services, market conditions to implement contracts with third parties
successfully and achieve its goals to protect customer data, avoid abuse of third parties
with these data

b. Dimension 2: Relationships
*Relationship with customers
- Psi has to improve disclosure practices to its customers to avoid extreme negative
reactions. Upon registration, users provide demographic, occupational, financial and
basic medical information about themselves in order to facilitate optimal coaching
session planning. And third parties of Psi use this data from Psi to launch advertisements
and send so many personalized emails. This will lead to Psi having to face so much
negative feedback and anger from their customers.
→ Effect: This can make the number of customers of Psi reduced remarkably, word-of-mouth
(referrals from customers reduced too) → reduced revenues and profits
→ There is a need for Psi to implement a change with privacy and disclosure clauses in B2B
contracts

* Relationship with third parties

- We think that Psi's position in B2C contracts with third parties is stronger because Psi
has data information, has more bargaining power and B2B contracts are not strictly
regulated by the mandatory provisions of laws. B2B contracts are usually individually
negotiated. So third parties need Psi to get access to the valuable information.
- Negotiation strategy can be used to focus on objectives.
→ Psi can negotiate with third parties and use stricter clauses with data usage, privacy,
transparency to avoid abuse of third parties with customers data

3.2. Describe risks

Psi CEO Paula is guided or bound by
- The laws and regulations of the European Union, which have been integrated into the
national legislation of the Member State where Psi is located. Psi should be aware and
prepare knowledge about legality of privacy data, terms of services in B2B contracts and
also B2C contracts to avoid problems with the State. This problem happens if the board
of directors, managerial people in the company lack preparation.
- Relationships with third parties may be worse but Psi achieves its objectives. The
revenue from third parties may reduce due to stricter terms of services and reduced
number of third parties. But there is a trade off. Psi should focus on customers more,
protect customer data and increase revenue and number of customers through
referrals.
- However, concerning third parties, Psi has more power, more valuable data (Data
valuation is paring customer data with customer behaviors) and there are many third
parties who need data in the market
- The process of improvement in the CM process can lead to higher cost of management
because it demands more human resources, information system, change and renewal
cost for a much better process.
Task 4: Once the B2B change request has been green-lit, determine the strength of Psi’s
negotiating power based on the value of the data it brokers and on the business setting
where it operates.

Factors that contribute to Psi’s negotiating strengths in B2B contract modification:

brokered the data Value of

The quality of personal data Psi sells is very high and desirable.
The Psi’s set of users’ personal data has a high level of variability, including
demographic, occupational, financial and basic medical information, which are
provided upon registration to facilitate optimal coaching session planning. These
characteristics of Psi’s data lift 2 main dimensions for evaluation of data: The strategic
value of customer data, pairing of customer data with customer behavior.
The data owned by Psi is also related to a variety of sectors such as pharmaceutical,
self-help, spiritual, occultist....
On the broker side, the benefit of continuous cooperation is much higher for the third
party than bringing down the level of control over promotional activities. Because at
the end of the day, if third parties lose access to the data, all the related activities
targeting potential customers will be blocked, thus negatively affecting sales.
Psi should point out the third party current and potential weakness of this data
operation: The frequency of promotional campaigns would make customers will be
averse to the amount of third-party advertising they receive as a result of using the
service, which in turn resulting in dissatisfaction and diminished returns.
During the negotiation process, Psi should navigate the vision of both parties to the
long-term consequences. If Psi and Brokers follow the orgitional contract, the B2C
Business Setting

relationship between Psi and company’ customers much likely to worsen overtime,
thus lower the numbers of current and new users, which ultimately limits the data pool
and the promotional activities which third parties can take on
Psi determines how hard it should press to business partners by weighing up the
business and cultural ramifications of requesting a change, and strategize negotiation
tactics. Moreover, the method to balance legal, financial, and personal relationships in
a tightly knit business environment—a delicate and formidable challenge created a
negative impression in the B2B sector it also makes it less likely for Psi’s business
partners that Psi is willing to renew the contract upon its expiry
In the process of reviewing the stipulations of the contracts, Paula believes that this
change in B2B contract is critical to her existing third-party data brokerage agreement
and she also showed the determination of fighting for this if business partners are not
willing to cooperate, which will expose the third parties to high level of risk of being
revealed the irregularities in the business practices, opening the door to a prolonged
and bitter legal conflict.
Task 5: Present the plan to the relevant company stakeholders (i.e. legal, communication &
PR, web design & IT). After a discussion, distribute the specific tasks and specify Psi’s internal
communication flows, which support monitoring and evaluation of the new measures.

5.1. Present the plan

Improvement plan

Changes in B2C side Changes to the format of the Terms of service and Privacy policy:
- Improve the organization of information with clearer headings
and subheadings
- Highlights important contents and provide explanation to the
legal terms (jargons). Hyperlink or pop-up notes can be used.
Changes to the contents of the Terms of service and Privacy policy:
- Re-examine the language used in the contract, remove all
language which creates uncertainty as to what happens to her
clients’ personal data
- Shorten the Terms of service and Privacy policy to make text
accessible and understandable to the widest possible audience

Changes in B2B side Request changes in the content of Data brokerage agreement with
third parties:
- Add a limitation to the frequency of promotional messages by
third parties to Psi’s customers.
- Add an additional contract clause to assert Psi’s right to call for
modification or termination of data brokerage agreements if
the data trading partner consistently fails to meet best
promotional practices and thus damages Psi’s brand trust with
its customers

Possible responses from relevant company stakeholders

Legal On B2C changes:

- Removing unnecessarily abstract and confusing language is
feasible, with potential positive changes in tone and style.
- However, rewording the text to shorten the Terms of service
and Privacy policy is highly risky and dangerous because:
+ Any deviations far from the standardized wordings can
lead to non-compliance with EU and national
 legislation.
+ Such non-compliance then can be used by competitors
and consumer-right activists to attack.
On B2B changes:
- The plan is feasible in case of individual negotiation with each
data trading partner, so as to have more bargaining power.
- As Psi’s crisis in the B2C market is the supply risk for its data
trading partner, cooperation is highly achievable for a more
moderate data usage which secures sustainable development
of both sides.

Communication & Changes in the content of Terms of service and Privacy policy is not
PR optimal since:
- The root cause of this backlash crisis is the inefficient
communication between Psi and its customers: Customers
were not well-informed of the data brokerage by Psi, despite
the Terms of service and Privacy policy have included the
standardized provisions. Customers are not interested in
examining these two legal sections when registering; rather,
they often skip for convenience.
- Therefore, to facilitate the problem, an information campaign
that presents Psi’s data brokerage in a prominent but not
legally binding form (FAQ page for example) is more feasible
yet also more impactful.
- This is an elegant solution to the crisis since it demonstrates
that Psi takes customer feedback and satisfaction seriously,
while at the same time leaving the legal framework of the
contract intact and minimizing the need for redrafting and
implementation efforts.

Web design & IT Changes in the format of Terms of Service and Privacy policy is feasible.
Improvising the FAQ page is also feasible.
5.2. Task distribution and internal communication flow

B2C changes

Legal Copywriter PR & Communication Web developer

Task distribution

Advise on FAQ page Synthesize the main Keep the customers Transform the
improvisation on the points of the terms of informed of the insights into a clear
legal content service and the changes and transparent
privacy policy into implemented by Psi information design
accessible passages for FAQ page

Internal communication flow

CEO => Head of CEO => Head of CEO => Head of CEO => Head of
department => Legal department => department => department => IT
team Copywriter team Communication team team
Legal team ⇔ Legal team ⇔ Copywriter and IT ⇔ Copywriter ⇔ IT team
Copywriter Copywriter Communication team

B2B changes
 Legal Business Development and Strategy

Task distribution

Revise and amend the Data brokerage List the B2B contract partners, starting with
agreement. the most valuable and lucrative ones and
going downwards.
Negotiate with partners individually.

Internal communication

CEO => Head of department => Legal team CEO => Head of department => BD team
Legal team ⇔ BD team Legal team ⇔ BD team

Task 6: Evaluate the efficacy of the measures implemented and determine whether further
action needs to be taken.
In this part of the CM process, we focus on the step of evaluating the handling of the contract
during the 4 previous CM process steps (plan, draft, implement, monitor) and the results
achieved. Psi can accomplish this task by using customer observation tools and analytics. In the
following part, we will evaluate the efficiency of some standards and practices.

Measures Efficacy

Website analytics The website analytics will provide information about the number of
people taking part in the website, the duration in which a person
comes to the website, as well as the geographical information of the
visitors. In addition, it will determine whether the change in terms of
policy significantly appeals to more people to visit the website or not.
Hence the Psi team will be able to know what aspects most people
are interested in, how often the customer clicks on a specific content.

Newsletter campaign The effectiveness of this campaign can be judged with the use of
some applications that help track the customers’ interaction with
each campaign. Some notable applications are as follow:
 - Delivery rates: A high deliverable rate means you are reaching
your intended audience. A low delivery rate means you need
to work on building a healthy subscription list.
- Open rates: The rate at which the customers open and read
the newsletter. This depends on the subject line.
- Click through rates: Relevant newsletter will have a high click
through rate.

Customer retention In the end, the strongest indicator of success will be the current
and Customer period's Customer Retention and Customer Acquisition rates. The
acquisition rate best signs of success would be a reversal of the downward trend in
maintaining former clients and an upward trend in acquiring new
ones. Paula and Don might look into the Repeat Purchase Rate, which
is a measure of client loyalty, for more information.

Customer Lifetime It is considered as a measure of the average customer’s revenue

Value generated over their entire relationship with the Psi UG. Knowing
customer lifetime value, the Psi team can determine these following
things:
- How much Psi can spend to acquire a similar customer and
still have a profitable relationship
- What kinds of products customers with the highest customer
lifetime value wants?
- Which products have the highest profitability

Survey/questionnaire A customer survey should be sent to customers sometimes after their

transaction. The survey will include questions rated from 1-10 such as
“Are you willing to recommend our services to others”. There should
also be free text questions for each customer’s specific experience.
This will enable Psi to gauge the number of customers who are truly
engaged with their services and willing to recommend it. Depending
on how the customers score their 1-10 questions, Psi can categorize
the customers into different types such as:
- Brand detractors
- Passive customers
- Promoters