- Revolution in the understanding of the importance of data
- Crossing the ‘creepy’ line
- Customers willing to share their data on their own terms
In 2018, Mark Zuckerberg testified under oath and faced the Senate Judiciary Committee and the Senate Committee on Commerce, Science, and Transportation, in a joint hearing. Even though some people associate this trial only with the “Zuckerberg Drinking Water” meme, for many, it was an eye-opening moment.
The Cambridge Analytica controversy was a turning point in our understanding of the importance of data. It was the beginning of a heated discussion on a matter of privacy on the Internet. People got scared; if Facebook allowed stealing data of 50 billion users, is it safe to trust anybody?
This event not only caused a significant reduction of trust for Facebook but also affected the public opinion about data privacy. According to Pew Research Center, 79% of Americans are “very”, or “somewhat” concerned about how the government and companies use their data.
Will the general distrust outweigh the benefits of user knowledge?
Amazon.com, Inc is a leader in collecting, processing, and analysing personal information from customers. The company uses predictive analytics to determine how customers spend their money to increase their satisfaction and build loyalty.
As Jeff Bezos, founder and CEO of Amazon, said:
“The no. 1 thing that has made us successful by far is obsessive-compulsive focus on the customer.”
This customer obsession involves personalising the user experience by analysing customers’ behaviour and putting their needs on a pedestal. However, as Bezos says “Customer obsession is not just listening to customers. Customer obsession is also inventing on their behalf”.
Focusing on the details
Amazon’s inventions, such as the Amazon Kindle, the virtual assistant Alexa, and the Ring doorbells, were welcomed with great enthusiasm and now are virtually-mandatory equipment in many households. However, their usefulness comes with a price—each of these devices stores an enormous amount of information about its users’ activities and habits.
The level of detail is mind-bending. Amazon stores transcriptions and audio recordings of every interaction with Alexa. It also keeps records of every motion detected by the Ring Doorbells, accompanied by the exact time of the activity, as well as every single tap on Kindle.
The extent of details of stored data terrifies many users and brings the question if Amazon really needs this amount of information and if it’s safe to entrust the company with our personal details.
Will the customers warm to the practice?
As previously stated, customers, conditioned by negative PR, are more and more concerned with the extent of material stored by companies, but yet they don’t want to lose all the benefits emanating from customer knowledge. At the same time, they don’t want to give away their data for free.
Customers are fully aware of the importance of their data, and they can compromise their privacy as long as companies give them something in return.
According to Salesforce, 63% of Millennials and 58% of GenX consumers are more than happy to share their data with companies to obtain personalised offers and information. This research proves that customers may be willing to share their data as long as it significantly improves their experience.
Data for discounts
Customers are also disposed to exchange their data for discounts. As Epsilon’s research
proves, two-thirds of adults agree that it’s worth giving their personal information to a company in exchange for discounts. Customers don’t pull any punches; they want to benefit from their cooperation with companies.
Probably the most important aspect that can warm customers to the practice of data storing is transparency. According to Epsilon, given 4 choices about data transparency, the most sizable proportions of respondents stated that they would feel comfortable providing companies with their personal information if they could easily see all their stored data.
Is the right to privacy dead?
Saying that privacy is dead is too strong a statement, but there’s no denying that the so-called creepy line has shifted.
Will the negative PR outweigh the benefits of customer knowledge? Unlikely. Even though concerns about data privacy has raised, customers are still willing to share their information with companies, as long as it operates on a barter basis.