“As marketers, our immediate concern is that consumers will start to place a price on their data – it’s only a matter of time before this affects marketers’ ability to collect data and use it to deliver campaigns based on insight.”
‘bought’ data / benefit exchange, where the brand indirectly purchases information from a consumer. The second is an observational exchange, where the brand notes consumer behaviour and infers insight from this. Another example is insight generated from ‘nudging’. This is where we observe the consumer responding in some way that indicates something about them. Gathering a combination of both these ‘types’ of data powers intelligence and deepens customer engagement. The opportunities for ‘observational’ data are rapidly expanding in correlation with the development of online touch points and social media interactions. This increases the volume of insight that can be gleaned by observing consumer behaviour, while decreasing brand reliance on the ‘bought’ data / monetary exchange model. This shift can pose significant problems.
Let’s also not forget the legacy of investment in CRM systems, and the ongoing quest to create a workable single customer view. Countless organisations have struggled in the rush to invest in large technological ‘solutions’ that rarely delivered their promise.
So getting the balance right between these two methods of data generation is vital – as is creating an efficient means of managing this. It not only provides an accurate view of an individual consumer, it makes the entire process cost effective. Otherwise a serious marketing misconception remains – that all data has value. It doesn’t.
NOT ALL DATA HAS VALUE Let’s be clear: data is not valuable on its own. The value only comes into existence if the data is correctly interpreted and profitably applied, regardless of its point of origin. The term ‘customer intelligence’ is a deliberate one – it describes intelligence from what we know about an individual. It’s about converting information into insight, potentially creating a value exchange that delivers the desired outcome to the consumer.
Whether we buy data from the consumer or observe their behaviour, we can only create a valuable return if we do something with it. Amazon would love to get its hands on a list of
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my music and film collection – this data about my tastes would drive tailored recommendations, leading ultimately to more sales. They want relevant data to recommend and sell me products. But would it care so much about knowing my favoured holiday destinations? Or my food and drink tastes? There’s a real risk in collecting all data available and storing it on a database, without having clear objectives about what you’re going to do with it. Collecting everything doesn’t lead to customer intelligence.
Observed data has little value in consumers’ eyes because they don’t know observation is taking place. Yet in the value exchange model, the very act of asking for information, could prompt the question of why we want it; and what they will get in return.
Most consumers don’t consciously associate a price with the data they are providing brands. However, we are becoming more aware of the role data plays in our interactions with brands. Consider the role of aggregator brands in the financial services sector.
In a short space of time we have come to trust these sites with a wealth of valuable information on our financial situations and insurance needs. We understand that by providing enough information we will receive a better price in return; centred on the best deals available to us. The end goal remains a commercial one, but the deals we seek are delivered through the provision of a service that can only work as a result of us knowingly and purposefully handing over our data.
How brands are using our data is also becoming a big, widespread conversation. Debates include the very public discussions over what Facebook knows (or is trying to know) about us. These debates flag up the importance our data now commands to a much wider audience.
As marketers, our immediate concern is that consumers will start to place a price on their data. It’s only a matter of time before this affects marketers’ ability to collect data and use it to deliver campaigns based on insight. Marketers need to prove to consumers that unlocking the value of their data is about more than a
commercial outcome so that consumers do not increasingly chose to opt out of providing any ‘bought’ data. With the value exchange, it becomes an emotional benefit. We then need to invest appropriately to build our sources of ‘observational’ data.
Some marketers will see raising the awareness of the value of ‘bought’ data as a bad thing, because it risks setting up the expectation in the eyes of the consumer that they will receive a monetary reward in return for them sharing their information. If this happens, consumers savvy to the value of their data could hold off in hope of a better ‘return’. The result is a competition between brands based on the ‘best offer’. This would quickly damage the value exchange model. If brands all sell the same product and are forced to reward consumers with discounts, then price becomes the only differentiator. Anything else is unprofitable. The stark truth is that this is already doing considerable damage to the retail landscape.
TIME TO GET EMOTIONAL This supports the need to raise the outcome of the value exchange of ‘bought’ data from a commercial to an emotional level, with the offer of an enhanced experience for the consumer. If the consumer expects something else – namely that we will make the right decisions and choices based on our view of them to vastly improve their experience of the brand in question – the dynamic instantly changes and ‘value’ becomes a misnomer for the real return that is being presented. By engaging with consumers on an emotional level, the relationship with the brand then becomes much deeper and will last much longer.
Marketing solutions need to combine ‘bought’, observed and inferred consumer insight, along with an awareness of why this data is being sought and how it will be used. But what does the consumer then experience? It’s the interface between the brand and the customer that ultimately delivers the proof that customer intelligence is able to create a brand experience that is a positive encounter, and not just one about selling. n
January 2012 19
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