I wonder whether trust would feature on either of your lists.
Trust is a very valuable commodity. It’s also very fragile – easy to break and hard to repair. The undocumented contract that exists between a business and its customers is all about trust. Any breakdown of trust has the potential to damage your corporate reputation, and the news of such damage can spread like wildfire.
If someone asked to borrow your wallet, or your phone, it’s not likely that you’d just hand them over. Not unless you knew them well and had a well-established relationship with them. Yet when it comes to looking after customers’ trust, many businesses make all the right noises but don’t live up to expectations.
Data: the frontline of trust
Living as we do in an era defined by data and in particular how much customer data is available to businesses, the importance of trust has never been more relevant than it is today.
One of the most important things to remember about customers’ personal data is that it belongs to the customer. It’s also very personal to them. The clue is in the name, after all. But while that might sound a little flippant, it’s something that needs to inform every organisation’s attitude to data security as a matter of priority.
There are plenty of regulatory reasons to manage customer data effectively, with the European Union’s General Data Protection Regulation, known to all as GDPR, being one of the most recent and talked-about examples. But while the regulators are the ones putting the legislation in place, it is customers who are driving this change, compelling the regulators to act.
Why? Because increasingly, customers have come to understand the value of their data. They have become more aware of its possible misuse, too. And consequently, people are more likely to only do business with brands they trust.
It’s a clear sign that the age of self-regulation is over. We all now operate in an era of increasing mandatory compliance.
Big data’s even bigger implications
From sales orders and accounting ledgers to basic customer information, organisations have always worked with structured data. But in recent years, this has been added to by the growth of digital channels, which has opened the door to swathes of unstructured data – big data.
When you start combining data from different sources you can reach some powerful conclusions. Everything you do online – every action, reaction, and interaction – leaves a trail. The infamous digital footprint. Once it is passed through sophisticated data science platforms, it becomes relatively straightforward to build detailed pictures of customers, not just in volume but at a very personal level.
In the early days, this manifested as getting offers from your supermarket loyalty card that relate to the things you buy. But now it’s a lot more personal. So much so that it might start to feel intrusive. And that can be a problem.
When personalisation tips over into intrusion
Augmenting behavioural data (what was bought, what was searched for, etc) with additional sources of information is no longer a purely hypothetical notion. It’s very real. Your age, where you live, your health, educational attainment, credit status, your tastes in music or movies, your political affiliations and so much more.
All of this exists online and is accessible to those with the tools and resources to find – or buy – it. This data is then sliced and diced to produce a detailed and sometimes highly personal picture of an individual and their preferences.
When combined with your digital footprint, the outputs aren’t only quite startling but can have huge implications too. Your choice of smartphone, the format of your email address, and your online browsing patterns are all predictors of your creditworthiness. Researchers in Germany believe you are more likely to default on repayments if you: shop from your mobile, use a free email service provider, or place orders at night. Your digital footprint could soon be used instead of traditional credit scoring.
That might be bad news for anyone with a poor digital footprint but a sound financial background, of course. But it could be great for anyone currently struggling to provide a credit history, as there are now fintech tools that can help evaluate your credit worthiness based on an analysis of many data points.
As an organisation you can choose what kind of citizen you will be in this new, data-infused world. This will be determined by your overall corporate culture.
There will be those who seek to monetise customer data to the maximum degree. But any data breach has the potential to be a breach of trust, and as a consequence of that, can deliver an unwelcome PR headache if customers feel they have been snooped on. It may well be that this is a managed risk, that the likelihood of this becoming a problem is deemed to be so low that there are no good financial reasons not to pursue the maximum level of data scrutiny. But some risks, no matter how small, can represent a calamity in waiting.
Beyond the day-to-day interactions and processes of data security, there are also important mindset changes to focus on. You should never forget that it is the customer’s data – it is personal to them, and they will regard an invasion of their privacy as totally unacceptable. This is an outlook that needs to become part of your organisational DNA. Once it is, it will quickly become apparent to all your stakeholders that trust and long-term successful relationships are your priority.
It’s understandable that privacy and compliance are regarded as necessary evils. Often the message that gets pushed is the negative one – the dangers of being hacked, the risk of huge fines. These are very real considerations. But that’s not the whole picture. As part of the leadership team of your organisation, you need to see privacy as an opportunity, not just an obligation.
Well-managed data enables a business to identify trends, to add relevance to customer offers, and measure the effectiveness of a wide range of strategic undertakings. You could transform your entire sales and marketing model from a mass-market approach to one that focuses on the customers you have identified as your most profitable. But you can only do that with the right data, with the right tools for analysis, and the consent of your customers.
Well maintained data is an extremely powerful force – just don’t allow it to backfire on you.