Posted on: Monday 30th of March 2015
For some time now we’ve been talking about personal data’s Perfect Storm. Storm clouds are gathering as many different forces – commercial interests and initiatives, rapidly shifting public opinion, technological innovation and change, legal and regulatory developments – all combine to trigger a climate-changing deluge.
Readers of our weekly newsletter Market Watch will understand what we’re talking about. This week as a perfect example.
On the legal front, Google faces UK legal action over alleged privacy violations while a battle between Facebook and privacy activists reaches the European.
Big brand manoeuvring
Big brands are meanwhile manoeuvring to position themselves in a world where the battle for trusted access to personal data is key. Thus the Chairman of HSBC felt it necessary to warn that “It is clear many people who want to get into the payments industry don’t want to get into the payments industry, what they want to get into is the industry of gathering the data of which payments are made by individual customers.”
Meanwhile Yahoo has signalled a shift in stance, announcing the ‘Yahoo Trust Unconference’ designed to “strengthen the community dedicated to building products that are safe and trustworthy for every user”. Significantly, it’s donating the proceeds to the Electronic Frontier Foundation, a US group spearheading many privacy campaigns.
Back in the UK, Aimia (which runs the UK’s Nectar loyalty scheme) has revealed new research on the ‘deletist’ consumer: consumers going dark on companies that bombard them with irrelevant marketing messages.
Meanwhile, on the technology front, the Washington Post reports on mounting concerns about the ‘creepy’ ways in which many online algorithms work, while Facebook announces an acquisition which begins to position it in the burgeoning market for the Internet of Things.
And, just to ram home the sense of insecurity and uncertainty, in the UK the Information Commissioner’s Office has begun an investigation into the sale of individuals’ pension details while in the US the bankruptcy of Radio Shack in the US has raised another alarm. What happens to customer data when a company goes belly up? In the case of Radio Shack, it could be that 117 million customers’ data may be put up for auction.
Personal data now a critical brand issue
What does this Perfect Storm mean for organisations?
One thing is becoming clear. How a brand treats personal data is becoming a key factor in the brand’s reputation.
For many years many marketers took the line that ‘consumers don’t care about their data so we don’t have to do anything about it’. They were confusing one thing – ignorance – for another – lack of concern.
That was a big mistake. In a world of ubiquitous data breaches and often devious small print, consumers are becoming very concerned. In some cases their fears may be over-wrought, but this is what happens when ‘ignorance is bliss’ turns into ‘a little knowledge is a dangerous thing’.
Personal data is not some trivial side-concern. It’s what it signifies that matters, and what it’s beginning to signify is safety: ‘am I safe doing business with you?’ Safety is the most basic of Maslow’s hierarchy of needs and it triggers the most fundamental and elemental of emotional reactions.
Given this, in today’s environment any marketer who continues to argue that trust around personal data is not critically important to the health of his or her brand is simply irresponsible. The race is now on to demonstrate that ‘when it comes to personal data, you are safe doing business with us’.
That’s pretty far reaching in its own right. It changes what you communicate, how and when; it impacts user experiences and reaches back into business models as ‘easy’ ways of making money (by selling data on, for example) become increasingly problematic.
Trust AND value
But demonstrating trustworthiness about personal data is just the first step. The reason why personal data is moving centre stage like this, is because of a deep and fundamental shift in our economy: the emergence of data as a critical economic resource, a means of adding value in a myriad of new ways through new insights, new services, new efficiencies.
The really, really big shift here is the recognition of the potential value of data, including personal data, to persons as well as organisations. If the first question for brands is ‘how do we demonstrate to customers and potential customers that if you do business with us you are safe?’, another, even bigger, question is following quickly behind: ‘how we can use data, including personal data, to add new dimensions of customer value?’ In other words, as well as using data to help the organisation achieve its goals, how can the organisation also use data to help customers achieve their goals, such as make better decisions and manage their lives better?
A growing number of brands are now getting their heads around the first question. But only a few, so far, have realised the second question even exists, never mind realise just how big it is.
In the long run, the biggest brand (and personal) fortunes will be made, and lost, not only around the first question of trust but also the second question of value.