Posted on: Thursday 27th of April 2017
A couple of weeks back, I was invited by the Information Commissioner’s Office (ICO) to come and give a ten-minute soapbox at their annual conference, a few folk have asked me to share what was said; it went something like this:
“At this year’s Mobile World Congress. Jose-Maria Alvarez-Pallete, the CEO of Telefonica asked the audience “What if we could develop a new relationship with our customers (by using new technology) to give control of the network back to them”.
This is a significant moment: one of the most successful mobile companies in the world suggesting that the future growth of their multi-billion dollar organisation could hinge on putting customers in the driving seat. This is also part of a wider shift happening at the heart of the Personal Information economy: the dynamic of power is moving from being purely in the hands of the organisation into the hands of the consumer – this shift is the shift from B2C to Me2B.
An unfair value exchange
For years, organisations have been making big business from big data. Trillions have been invested in developing mind-blowingly clever technology to improve how data is captured, analysed and exploited. This has created enormous value for organisation but relatively little for their customers. Up until now, this hasn’t mattered as consumers were relatively unaware of what was happing with their data but the mainstream reporting over the last few years (Snowden and the NSA, Talk Talk hacks and creepy Google ads that appear to have been prompted by a conversation you were having next to your computer) has changed all that.
Consumers are more aware now that businesses are using their data in questionable ways and, unsurprisingly, they’re not happy about it; according to a poll by ICO last year, 67% of consumers are concerned about their data being sold on to marketers, and nearly as many (63%) are concerned about receiving spam emails and texts. All this said, there’s an apparent contradiction at the heart of all this – if consumers were so bothered by how their data is being shared then why do they continue to do it on a daily basis through news sites, social media and apps (especially the apps)? I, and many others, see this because consumers have no choice as they are locked in a Faustian pact. They don’t want to share endless amounts of data (let alone read the T&C’s about what’s happening to it) but they (we!) have grown to depend on the services that these companies provide.
Businesses need to act fast
It’s for exactly this reason we have the new European regulation GDPR, with its power to issue eye-watering fines for non-compliance, coming into effect. It will force organisations to fundamentally rethink the data sharing relationship with customers. Essentially, consumers will become empowered gatekeepers of their data, making it available only to organisations that meet their needs and expectations; those that protect their privacy and deliver clear, demonstrable value using their data. Whilst GDPR remains a compliance issue, it is also an enormous opportunity to redesign the digital economy for sustainable growth.
And it couldn’t happen at a more important moment. We’re entering a phase of the digital market evolution in which even more personal information, with potentially higher sensitivity, is going to be generated through the Internet of Things (IoT), which is already setting a precedence for a truly connected world.
Organisations need to start investing time working out how they will develop new propositions with a clear mutual value proposition for their customers; the very services which will help consumers to manage their digital lives more efficiently and with less friction. They will need to look carefully at how revenue is created from their customers’ data and whether it’s going to be building or undermining long-term trust. In short, organisations are going to have redesign themselves (largely) around the principle of shared value.
ICO and GDPR will limit the harm that businesses can do in the current digital economy but whether of not the digital economy will flourish depends on businesses going beyond compliance; to rethink the nature of their customer relationships to create sustainable two-way value. Given the potential prize for business to gain access to near perfect, permissioned personal data, the argument for creating shared value has never been so compelling.
To finish, I’ll quote Salesforce’s Mark Benioff. ‘We’ve had a digital revolution, now we need a trust revolution.’