Against a background of every increasing speed of innovation and disruption, businesses are starting to realise that becoming truly customer centric is critical to driving long term revenue growth. In my view it is the only way.
At the heart of any customer centric strategy is the need to harness the power of customer data – for the benefit of your customers, whilst maintaining trust.
In their recent Harvard Business Review Paper on “Customer Data: Designing for Transparency and Trust”, Morey, Forbath and Schoop identified three different categories of customer data:
1) “Self reported data” that consumers volunteer;
2) “Digital exhaust data”, such as location data and browsing history;
3) “Profiling data”, which is used to make predictions about an individual’s behaviour.
User generated content forms a key part of self reported data and profiling data, however the quality of that content is not created equally.
At the low end of the quality scale is consumer content and data that has been scraped from the web or obtained via social network data feeds (APIs), which whilst valuable, requires careful collation and matching to a business’s CRM system to ensure authenticity. At the very top of the quality scale is data that you know is authentic and has been collected directly from your customers – in other words, your customers have volunteered it. This is customer data at its cleanest and most valuable to any business. It has been provided in the expectation that it will help other consumers and your business to serve the consumer better. Which brings me to the issue of trust.
Consumers increasingly realise that their customer data is valuable and that it needs to be protected securely. - Highlight to share -
Consumers increasingly realise that their customer data is valuable and that it needs to be protected securely. The now regular, high profile data security alerts at corporations only serves to emphasise this.
Furthermore, consumers today have differing perceptions with regard to how trustworthy different businesses are when it comes to looking after their data. Morey, Forbath and Schoop (May 2015) report that only 56% of consumers trust social media firms when it came to making sure that their personal data was never misused, compared to 85% for payment or credit card companies.
It’s clear that if a firm wants to thrive, when it comes to customer data, they must always act to build trust. - Highlight to share -
What’s more, some types of customer data are more valuable than others. The most valuable is that obtained directly from your customers – where you can authenticate that each individual is a genuine customer and that you are receiving a representative sample of data that shows the good, the bad and the ugly. It’s clear that if a firm wants to thrive, when it comes to customer data, they must always act to build trust.
Those businesses that recognise these two attributes when managing customer data will find that they have a key ingredient to becoming more customer centric – which is the only way to drive long term growth today.