Are you racing your way to data supremacy; chasing that superlative moment when all the data you collect becomes the ultimate driver of your business growth?
If not, there’s certainly a case for why you should be. After all, the world produced one zettabyte – or one trillion gigabytes – of data in 2017. That’s a shed-load of information just begging to fuel your customer understanding and drive acquisition.
Very soon, the way we use our data will be our core competitive advantage. Much has been said about the power of smart data usage and its potential to translate to increased revenue and profit. What’s less widely discussed, however, is the danger of being dumb with your data.
Poor data practices are not just a missed opportunity for growth; they can have dire consequences on your bottom line.
A study of e-Commerce across G20 economies by Boston Consulting Group determined that up to half a trillion dollars was at risk because of poor consumer trust in the way their data was being handled. Extrapolate that out across other categories such as health and government and the impact is astounding.
So before (or more plausibly, while) we race to amass and apply consumer data, we should be pausing to better understand firstly, how consumers feel about us using it, and secondly, what they’d like us to be giving them in return.
Because while unlike other vital resources, data – the ‘oil of the future’ – is not finite, the trust needed in order to procure it certainly is. If we abuse this trust, their willingness to trade can be quickly rescinded.
And if that happens, all the promise and potential of the ‘Internet of Things’ – rivers of behavioural data flowing from smart fridges, voice activated devices and connected homes – may well find its flow stemmed by the dam wall that is the ‘Internet of Me’.
The ‘internet of me’ refers to technology which connects our minds and bodies with the online world, transforming our biological and cognitive activity into data which can be monitored, shaped, and shared.
In the IoM, consumers will increasingly be the masters of their own data, understanding its value and trading it for things they in turn value, when, where and with whomever they choose. It’s going to set a new standard for what’s considered a positive exchange of data.
This increasing data mastery was a key focus of Carat’s recently conducted ‘Data Consciousness Project’ (DCP) – a bespoke research project exploring the ways Australians are sharing their data with brands.
The DCP found that not only are consumers increasingly aware of the value their data represents to businesses and brands, they also expect a great deal more in return for providing it.
We are at a critical tipping point.
The ‘cost’ or value of data has gone up directly in line with growing consumer unease with what they perceive to be a ‘data grab’ by brands, and a lack of understanding around how they plan to use it.
86% of DCP respondents admitted not knowing what happens with the information that they provide, with 92% worried that organisations lack secure systems to prevent hackers stealing personal information.
Striking the balance of a positive data exchange has never been more imperative, or more precarious.
To help your brand get it right, Carat has identified the five factors critical to a positive exchange:
Sensitivity: The main consideration before any data exchange is to understand the sensitivity of the data. The more sensitive the data, the less willing consumers will be to part with it. The risk of parting with this data needs to be outweighed by the following factors:
Benefits: What consumers will receive in return for the data they are providing. What’s in it for them?
Purpose: The reason the data is being collected. Will it be used for purposes other than to directly benefit the consumer? If so, they want to know what for.
Trust: The level of confidence and certainty the consumer already has in your brand to safe guard the data they are providing.
Have they had a positive experience before?
Control: The perceived power consumers are giving up. Is there a limit to the amount of data they have to provide? How is it extracted – volunteered or observed?
Carat’s Chief Data and Experience Officer, Brendon Cropper, said of the study:
“Tech and data are the easy parts of what is a complex relationship between brand and customer. The challenge lies in delivering meaningful value to consumers in order to create sustainable value for our brands.”
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