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We are all sharing more data than ever before with other organisations in our emerging Big Data Society. Sharing lets us use our resources much more precisely and produce completely new services.

But misusing customer data risks destroying customer trust. Still, we all need that missing piece of the Big Data puzzle, so we all need to share more.  

In the last year I’ve been organising roundtables and interviewing Big Data experts and industry regulators to try and figure out how to solve this problem: how to share more data whilst still keeping customers’ data safe.

Here are some of the tensions I’ve found between the vast commercial benefits of sharing data more and the dangers to brands and consumer trust.

Share more data – it does not wear out and you can keep a copy

New Big Data analytics techniques are saving firms a massive amount of money by helping them to target advertising, offers and other resources. Nothing wrong with this – and we are helping some high street retailers and financial services firms do it right now. 

Digital marketers are always being pressed to do cleverer and more sophisticated things with data. Like using behavioural ‘finger prints’ to automatically identify customers on whatever device or channel they use – even when they don’t log in. Or using artificial intelligence to spot customer characteristics that the customers themselves were not aware of themselves. Retailers can now even buy-in the analytics as an automatic service. 

But the more you push the boundaries of your analytical powers then the more you find you are missing some key piece of the data puzzle. Of course, then you will look to buy-in data or insights from sources like Experian and Kantar.

Jenga blocks

Big Data analytics is like playing Jenga with the pieces that you have: the data you own, the analytical tricks and toys you can use, the insights these could together produce and your business needs. If you change any of these – the data, the tricks and toys, the insights or your business needs then all the others need to change. 

But sometimes your business needs produce insight requirements that cannot be generated from the data that you have. So there is a growing practice of sharing data.

Also, there is the problem of non-customers. You have lots of customer data that describes the activities of your customers but you have nothing on your non-customers. So you find a source to buy it from or you swap insights with your supply chain partners.

This is what I mean by data sharing – open data, bought-in or even the internal reuse of customer data. All good stuff... up to a point.

The problem is, whilst this is usually legal and usually ethical, sometimes it is not. And even when it is absolutely spankingly legit and damn right organic in its ethical provenance you still have to be very careful because it might rub your customers up the wrong way or it just might surprise them. 

Remember the ‘surprise’ caused by the revelations about iPhones and other smart phones logging your location data? If customers even understood a little bit about what could be inferred from smart meters that record energy use in their home, location and phone call meta data, supermarket loyalty data and all online activities then they would be somewhat surprised. 

We have to keep customers' data safe, but...

Sure, we know how important it is to keep our customers’ data safe. But customer data regularly gets lost and there is always the temptation to monetise it a wee bit more or to be a little bit more clever with it than customers would feel comfortable with. For example, things like personalised pricing, which can have negative as well as positive effects for the customers that generated the data.

Everyone is under pressure to perform better and develop new stuff. So what happens when some well-meaning colleague makes the wrong decision and uses customer data in a way that customers would not expect? Either by selling it, sharing it with a trusted supplier brand or just by using the customers own data in a way that is not necessarily 100% for their benefit.

And then there are firms that make a lot of money by reselling customers’ data in a completely legitimate way for uses that would completely surprise the customers who generated the data. More tellingly, these uses of data might surprise the retail brand that the data originally came from. 

The issue is about your customers being aware and comfortable with the implications of you using their data. It’s not totally ‘their’ data but let’s not get into that. People are just not aware of the many ways that their data is being used. Firms do not make it easy for them to know, and in fact firms don't know themselves how data will be used in the future – no one does. We run data science projects with the biggest brands and at the frontiers of Big Data research, but all of us are just scratching the surface of what can be done.

The same applies to staff and when data gets passed around, again legally, who can say what will happen to it and who will be able to access it? There is a huge lack of awareness with staff as well as with customers.

The problem is that the value and the harm that data produces come from its use and reuse, which can be different every time and which can go on and on. Data does not need to wear out. 

We must safeguard customer trust

‘Data’ is such a generic slippery word – ironic, when actual data is the opposite to a commodity – so it is easy to talk in terms of outcomes than the many specific types of data and their multiple uses.

The key outcome to safeguard is customer trust. If you lose their trust they will not give you their personal data, i.e. the really good stuff, and your brand will be damaged. 

The conundrum of data sharing 

We need to do more data sharing if we are to get the full benefits of Big Data. And make no mistake, we are heading for a Big Data society whether we like it or not. In the near future we will all share much more data as consumers, as staff and as firms.

Data sharing is good because it gives those we share it with a more complete perspective. But data sharing is also risky if we do it incorrectly. So we must make sure that our staff and commercial partners do the right thing and that our customers are aware and comfortable with the implications. 

Aimia has some sensible ideas for helping staff and other people understand the implications for customers in how data is used, and the ICO has some detailed advice as well. 

But most customers have no idea whatsoever of the implications of giving their data away to the firms that they buy from. Even the most expert digital marketers find it difficult to keep track of all the data that they create when they buy things online as consumers, and just like everyone else, they have little idea of what happens to most of this data. 

If expert digital marketers find it tricky then what hope do most of our customers have of understanding this new world of personal data uses? And how can we protect their trust and our brands when they get a surprise or something worse?

We’ve been wrestling with this conundrum: how to share more data in a safer way? What’s your missing piece of the data puzzle? What insights would you kill for?

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Published 10 March, 2014 by Duncan Shaw

Duncan Shaw is Consultant and Lecturer in Information Systems at Nottingham University Business School and a guest blogger on Econsultancy. You can read Duncan's blog or connect on Google Plus

3 more posts from this author

Comments (2)

Pete Austin

Pete Austin, CTO at Fresh Relevance

Puzzled by this article. It's perfectly possible to use Big Data successfully without sharing/selling your customer data outside your company and its contractors.

Most companies don't get anywhere near the maximum benefit from the data they already have (e.g. see the link below), so it's a bit early to advocate "it's always good to share".
https://econsultancy.com/blog/64444-why-aren-t-the-uk-s-top-ecommerce-brands-doing-cart-recovery

about 2 years ago

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Duncan Shaw, Consultant and Lecturer in Information Systems at Nottingham University Business SchoolSmall Business

Hi Pete, I agree, most firms don't sweat their data assets enough yet and selling is an option [e.g. http://wp.me/p2FiU0-5A].

But different analyses and different insight objectives need different data. Sometimes your firm doesn't have the data internally and you have to buy it in.

Just because you are not fully monetising your firm's own data does not mean that you have access to all the data that you need, e.g. data that describes your non-customers.

about 2 years ago

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