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Data is a hot topic. It always has been. But now there’s way more of it.
For all those tired of the talk of big data, which is changing services, there’s also a backlash, a sort of arts and crafts movement in statistics (no offence intended) with a focus on using ecommerce product and customer data efficiently, now that it can be looked at it in high fidelity.
Perhaps the biggest boom area in marketing technology at the moment is CRM. But aside from companies getting their houses in order, building them on the rocks of data collection, triangulation and testing, there’s talk of a further revolution.
The revolution comes in the form of a data empowered consumer. The customer is gaining more awareness of and control over her data. Will we approach a point where consumers are fully aware of the value of their data, and are capitalising on it with companies that enable a value exchange, providing extra services, products or savings?
Well, this post is going to have a lot of rhetorical questions in it, questions inspired by last week's Personal Information Economy conference run by Ctrl-Shift. But it will also have some facts and a particularly good case study, Money Saving Expert’s Cheap Energy Club.
So, have a read and let me know how far you think a data empowered consumer can change advertising and marketing.
The case study
Here’s the explanation:
Come on board, tell us what your current gas and electric tariff is and we'll tell you, if you're overpaying or not. Then, as many tariffs are only cheap in the short-term, we'll monitor the market for cheaper ones and email you (or text if you like) when you should switch.
Can't be bothered to switch for a £20 saving on your gas and electric bill? Just tell us what you will switch for and we'll only email when you can save that amount. Bingo! It'll all be filled in for you - just click the button.
Rational judgments such as deciding on utility tariffs are an obvious starting point for the data empowered consumer.
Industries that are not traditionally regarded as transparent, in fact are often thought of as obfuscating, such as energy and telecoms, may be industries fit for change. The value exchange for the customer is evident, but the hassle of changing is often too much.
Three words are important here. Awareness, access and value.
Awareness, because thanks to PRISM and various high-profile data security breaches, the public is more aware than ever of the broad idea of data, partly due to there being so much more of it, and its transfer being easier.
Access, because access to data is much quicker and easier for the consumer. Banking is just one example of an industry that has transferred very quickly online for the majority of the populace.
And value, because the customer is arguably becoming a little more aware of the value of her data, partly through the profusion of advertising in social media, amongst other channels.
Niche social networks like Strava for cyclists are part of this consumer awareness and access. Users share information online, often in pursuit of leisure, not just value when shopping.
In advertising, targeting is big at the moment. Whether through simple segmentation of site traffic, or through the idea of buying audiences via programmatic, rather than simply buying generic impressions.
How comfortable the customer is with advanced targeting and what this means for trust is important.
The last 10 year period has seen 7% engagement with digital ads decrease to about 0.05% today as the customer’s trust in ads has perhaps decreased as the volume of ads has surged. This is almost an example of game theory, with the customer as dove and the advertiser as hawk.
At the moment some consumers can be said to be participating in the use of their data. They are explicitly aware that it is being collected and used and have giving permission for companies to do this.
The drivers for customers giving up data can be viewed below. Utility is probably the most important. If giving up data isn’t going to have a definite use, then likely the customer won’t care. Of course, it has to be easy and appropriate, too.
The scale below shows the various levels of consumer knowledge and action, from a state of being unaware to actively resisting data collection by trying to remain anonymous on the web.
It can be argued that one of the problems is education. GAFA (Google, Apple, Facebook and Amazon) can conceivably be placed near the bottom of this scale.
Their customers often use these services without regard to what will happen to their data, or indeed perhaps even being unaware data is being collected. Even since, the NSA revelations, people carry on using Google and Facebook with awareness of giving away data.
Of course, if you don’t want to give away data, it’s very hard to use Facebook and Google, and these two companies have a stranglehold on providing customer knowledge to companies.
Whether this stranglehold can be broken, and consumers will start to eschew Google and Facebook to find services, instead providing data direct to companies that can tailor products and services to the individual consumer is perhaps a false question.
Google has its own comparison engines after all, and with Google Now is making strides towards a more explicitly tailored experience.
I’m going to leave these questions here and hopefully you will leave the answers in the comment box below.
- How do we make people active and not passive?
- Do consumers care about giving their data away?
- Do companies properly understand value exchange? Is the traditional 1% given to loyal customers (Clubcard and Nectar) enough in all sectors to encourage customers to hand over data?
- How best can companies present the case to the customer? Simply ‘can we have your location’ or something more compelling?
- Does success for companies mean sending fewer marketing messages?
- What are the ethical questions involved? Should health and credit scores ever be used explicitly to create value?
Laurence John, founder of CTRlio, made an intriguing proposition. In years to come, will travel be revolutionised through consumers openly sharing their proposed journeys? This would allow a driver to offer their spare car seat to someone travelling the same route that wants to save on a train ticket.
This is the kind of benefit from sharing of information that consumers might yet start to demand.