Oil had had many uses for centuries, but two primary innovations—electricity and the combustion engine—drove global demand for oil and its by-products to new heights.
Like oil, innovations impacting data have enabled the manipulation of data to perform tasks and provide insights, which in turn has driven demand for more data.
However, as more and more data is collected, consumers are increasingly concerned with the quality and quantity of data collected about them and how it is being used. Said Patrick Salyer, CEO of Gigya, Inc., “If data is the new oil, then trust is the ultimate currency that drives this new data economy.” Those organizations that build unwavering trust with their consumers will have the best platform for long-term success.
“Data is the new oil? Absolutely. Toxic if mishandled.”
Why is everyone talking about it now?
The combination of three growing forces—Moore’s Law (computing power), Metcalfe’s Law (network expansion), and Gilder’s Law (large, inexpensive storage and processing in the cloud)—has recently created a new economy. In the new economy, the value for organizations does not lie solely in the products and services that they offer today, but in the ability to continuously improve consumer experience to retain loyalty tomorrow. Data, code, and devices are symbiotic, where advances in any one of these three will drive up demand for all.
We are at the dawn of the digital age, where the acquisition and consumption of consumer data by organizations are critical to the success and staying power of the organization. However, this results in the need for organizations to evaluate the impact of their data and data analytics strategy on their consumer’s data privacy.
For today’s organizations, the question of what data to collect and how to use it has become increasingly challenging. And the requirements surrounding data management are expected to become even more complex in the future. Some of the evaluation and policy change is being driven by regulation (for example, General Data Protection Regulation, or GDPR, in the EU), but many businesses are doing it to establish or retain the trust of their consumers.
What are consumers demanding regarding their data?
Any organization that requests, acquires, and processes consumer data must proactively reexamine how the data is collected, secured, managed, archived, and destroyed (if required). As organizations work to identify new ways to benefit from consumer data, consumers are beginning to ask, “What data are you asking me to share, and how else are you using that data?” Consumers still want to share data about themselves for their own benefit. However, today they are demanding that organizations use their data only for the purposes to which they have agreed and that they keep their data safe.
Even when organizations are aware of the need for a business model that recognizes and rewards their consumers, most do not have a strategy. According to an Accenture research report, “Although 72 percent of business executives across all industries agree that rewarding consumers for sharing their data is an important strategy, only half report that their organizations are acting to take advantage of this opportunity.”
Establish a “data-protection first” policy
The key elements of a data-protection first policy will be the same for most organizations:
- Define the team needed for the data strategy and what data needs to be collected
- A cross-functional team determines what data the business needs
- Provide transparency on what data you have, what data you want, and what you will and will not do with it
- Do not assume your consumers know what information you have and want on them
- Outline the process by which the data will be collected
- Ask for permission to gather your consumer’s data and clarify the benefits to them
- Institute the security controls that will protect the data
- Explain in clear terms the security measures that have been put in place
- Establish a plan to continuously monitor
- Practice empathy through listening; make it easy to leave and know your audience
- Decide on the tools to support your organization’s data-protection first policy
- Ensure that your consumers are aware of their privacy rights and have reviewed and selected their privacy settings before giving them access to the benefits of your product or service
The ability to quickly gather, analyze, and execute on consumer data will continue to increase with advances in technology and expanding consumer expectations. It is imperative that your organization creates a culture (backed up by data-protection first policy) of handling consumer data with care.
Stay tuned for additional blogs discussing the impact of establishing trust in specific industries – with data as the new oil, and trust as the new currency in the new economy.