Your Customers Want the Benefits of Big Data…But Can You Deliver?
We all can probably list and discuss the advantages and value big data promises our businesses. We’re aware of more effective marketing or greater business efficiency and productivity. And while we are wary of the potential downside and risk in terms of security breaches and data misuse as we read this on a regular basis in the news – have we considered the usage of big data in regards to our customers’ wants and needs?
We can limit the discussion to be an internal one, “what do we get and what’s the risk?” If the potential cost is too high, then perhaps we can pass on the opportunity and decide to continue as we have, prudently living with our current efficiency level or operating approaches. I have heard and seen this approach taken by financial services companies. Similar companies may realize that the potential of lawsuits or negative public perception would be more destructive than potential gains to be had in leveraging customer data. I’ve seen, first hand, a “successful” product (good financial returns and excellent market acceptance) discontinued due to “potential risk of gathering behavioral data that might reflect poorly on its parent company.”
At the time, a sensible option, but fast forward to the age of big data.
That choice no longer exists if you plan on gaining your customers’ current and on-going business. The expectation that you are already capturing data about them and, most importantly, using it to their advantage, is what they are expecting. (As is the assumption that you are securing it and keeping it private.) Head-in-the-sand approaches don’t work at the intersection of the empowered, connected customer, and big data.
Consider the following:
- A global survey finds that about two-thirds of people are willing to share data in exchange for benefits. (Morey, Forbath & Schoop “Customer Data: Designing for Transparency and Trust”, May 2015, HBR)
- A sizeable proportion of consumers (65%) are happy for companies to use their personal information if they benefit through more targeted marketing. In total, just over a third of customers are happy for companies to target them with special offers and recommendations based on their personal data (35%), whilst just under a third are happy for companies to develop new products and services based on their personal data (30%). (Ernst & Young: Data Is Key To Building Trust With Customers (6/16/15)
- Surveyed consumers welcome (personal, data-driven) in-store retailer communications (82%) as well as personalized online experiences for items they are considering or of interest (59%). (Accenture: U.S. Consumers Want More Personalized Retail Experience, March 2015)
- 60% of respondents are willing to share personal information in return for non-monetary goods or services. (Consumer privacy: What are consumers willing to share? (PWC 2012)
When working in companies, we tend to assume our customers see us relative to their expectations of our products – our features – our benefits. But just as such myopia has been the failing of many new products brought to market, we need to realize that within the customer’s context, they are being influenced by others not even in our industry. “If Netflix or Amazon can make recommendations based on what I enjoy or have purchased, can’t you use the data you know about me to make my experience with you more about ‘me’?” Customers are not thinking about us in relation to ourselves, but in relation to how they navigate in all of their purchases and experiences.
Similarly, they are not seeking a one-size-fits-all approach to intimacy… they want it about them, individually. We have seen this recently in researching preferences for making content and topic recommendations at conferences, and how much information they would be willing to “give” to “get” more personalized recommendations. While we can broadly cluster respondents – those not at all interested (i.e. “I’ll decide”), those willing but wanting to set the limits (i.e. “limit setter”), those who like to pick and choose what information they will provide for what benefit (i.e. “cherry pickers”) and those willing to give all available (i.e. “all in”) – their expectations are that the data will be used to make very individual recommendations, not those of an affinity group or cluster.
And, why not…? The technology exists, the data is available, and the expectation has been set.
So, while we must go deeper into the area of data collection, mining, and responsible use for customer value, we must do so in a manner that aligns to our business values… with security, privacy, and big data morality at the core. To wit, 81% of consumers are more likely to give their business to companies they can trust to use the data they collect about appropriately (Colin Strong, The Guardian, 10/13).
Businesses that can balance the usage of big data for consumer benefit and the associated risks will certainly be building value for themselves. Yet, what is more telling is that the “do nothing” option is no longer a viable one. Welcome to the Big Data Morality dance, your customers have been expecting you.
Let’s continue the big data morality conversation on Twitter with #datamorality and catch an upcoming presentation at the MIT CDOIQ on July 22 (you can view the presentation on SlideShare).