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Is Your Customer Data For Your Customers Benefit?

We are all increasingly active in the digital space. 70%+ of people in the EU, and growing, use the Internet*, all contributing towards more data generation. But public misperceptions and perspectives on data and how it’s used for marketing, threaten to limit data’s potential curtailing marketers’ abilities to provide personalised services. Careful data usage greatly enhances our lives. Unfortunately, fear or irresponsible use (a thankfully rare occurrence), along with some sensationalist journalism has led to a generalized perspective of data as ‘bad’ or ‘creepy’.

 

Misuse has serious consequences. But data is neither ‘good’ nor ‘bad’. It is merely a tool, facilitating an action. Transparency of use and benefit – keeping consumers informed - is the way to build trust, allowing both sides to take a balanced, informed perspective on data use.

 

Simply being able to access the right customer data and use it for your customer’s benefit is not necessarily straightforward. It requires customers to willingly share their data, trust, and understand why they should do so. Legislation and regulation must also be appropriate and fair to allow a balanced approach to data.

 

Understanding security, privacy, and consumer expectations

 

When it comes to data use, most consumers fall into one of three categories: The unconcerned (16%), pragmatists (53%), and fundamentalists (31%).** (source DMA, Future Foundation 2012)

 

Those who are unconcerned with how their data is used, or what for, tend to be male and under 25. Pragmatists are likely to be under 25, female and accepting of data use, as long as it is responsible. The most resistant segment, the fundamentalists, tend not to use social media or the Internet in general, and mistrust data use - they would like to see increased structure and regulation.

 

Of course customer data must be used responsibly, kept secure, and shared appropriately – and legislation, regulation and reputation are there to ensure this. These are the ‘table stakes’ for  trust - the number one reason people will agree to share data. However, 65% of consumers now expect organisations to use data to deliver better services and marketing, so after ensuring security, marketers must build on that trust and fulfil those expectations – turning the initial trust into personalised service and products of value which in turn leads to more trust and a virtuous circle.

 

Freedom, access and personalisation rely on consumer understanding and awareness

 

As data generation increases, perspectives on data usage evolve. 70% of people believe that attitudes towards privacy are changing, with 80% believing that disclosing data is just a normal part of life today. But while your customers may have particular expectations when it comes to data use, trust and sharing, how much do people really understand about data use, and its implications?

 

Do customers know why they’re trusting data use and what they expect as a result from it? Do you?

 

When putting data to monetisable use, the potential possibilities are infinite. But responsible use means keeping the balance between too much, and too little. Your customer data will only aid your consumers if used in the right way.

 

Freedom of data use is a constricted thing – if we allowed a world where data is used too freely, we might see the healthcare and financial industries (health insurance for example) accessing our food histories, seeing if we spend on alcohol, linking with gym membership data (or lack of), and deciding what to charge us for services. A fundamentalist’s worst nightmare. But in a world without any data freedom at all, we would be unable to personalise anything – marketing and advertising would be unbiased, and importantly irrelevant and untargeted. Those interested in extreme sportscould receive adverts for retirement homes – and vice versa. Indeed a serious scenario for consumers is if draconian data restrictions lead to broken advertising. If this happens, then the providers of free digital services such as search and social sites, will consider charging for their services as advertising revenue will dramatically fall.

 

Keeping consumers at the heart of an organisation

 

Personal data does not have a one-use-fits-all approach. Responsible use is there to balance data in the middle, away from the extremes of the spectrum, and is something consumers should be aware of.

 

With a balanced approach, we can access the right, specific consumer data and ensure it is appropriately used - targeted to best serve the relevant consumers. Basically, data puts the consumer at the heart of an organisation – which is the key to securing long term loyalty, much wanted and better services and products, advanced customer experiences and increased revenue.

 

*Information throughout, courtesy of Acxiom UK’s whitepaper – ‘Personalisation: Hanging in the Balance’ 2013

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Tags: consumer, customer, data, personalisation

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