Why bad data always makes for bad decisions
We live in an increasingly digitised world where more and more of our day-to-day interactions occur via mobile app or online. Every interaction in this digital world leaves a data footprint, with each footprint forming just one of the myriad parts of our digital identities. In an ideal world, this ‘identity data’ would allow businesses to gain real and valuable insights into their customers’ likes and dislikes, and to tailor every interaction to suit their personal needs and desires.
Sadly, our world is far from perfect – and even less so is the data that much of our digital economy generates. According to our own research into how and why customers share their personal data, more than two thirds of UK consumers admitted to deliberately providing false personal information. The reasons they gave varied, but all of them related in some way to concerns about how the data would be used. Even if the information your customers provide is accurate at the initial point of capture, contact details and customer behaviour evolves over time and soon that data is no longer accurate.
Even using the most advanced analytics tools on the market, bad data can only provide you with bad insights. As the saying goes, "If you torture the data long enough, it will confess to anything" – and acting on incorrect assumptions will not only end up damaging your customers’ experience but also your company revenue. The issue of ‘clean’ data still looms large. No matter how sophisticated the technology that supports our customer interactions, collecting accurate data and keeping it clean remains a fundamental challenge in the digital economy.
But how can you make sure that the data you’re provided with is accurate in the first place? Is that really an email address that we can use for ongoing communication, or a fake one set up simply to filter out ‘junk’ emails? It all comes down to building mutual trust. You trust we won’t use your email to send anything other than communications you will perceive as relevant. And we can trust that the data you share truly reflects who you are.
Trust is something that has sadly been in short supply in recent years, in no small part due to the widespread misuse or loss of consumer data. In our survey over half of businesses (59%) admitted they collect data which is not used or even useful to the organisation, a clear waste of time and resources – and a dangerous gamble of their customers’ trust. Only 17% said they didn’t face challenges with their data.
Furthermore, the 2016 Edelman Trust Barometer has revealed some worrying truths about the state of trust across the globe. Despite what at first seems to be a welcome increase, with trust in businesses rising to 53%, the figures instead mask an increasing disparity between the general public and the ‘informed elite’ (wealthier, educated, and engaged individuals who represent only 15% of the global population). In the UK this trust divide has now broadened to a chasm of 17 points, whilst in the US it has grown even further to an astonishing 19 points. If we aren’t to see trust eroded further, we must take steps to repair the damage and there needs to be a shift in the way businesses collect and use our personal information. The value exchange must be crystal clear and businesses need to be open and transparent about why they are asking for the information, how they’ll use it, and the value they’ll give back to the customer.
At the moment only 30% of consumers believe the benefits of providing personal data outweigh its risk, and only 10% feel that they themselves really benefit from any sharing of personal data. Loyalty schemes are fast becoming the way in which marketers seek to gather their data, but customers have to be willing to sign up to them in the first place. Once they have, organisations need to ensure they’re leveraging the data they collect in the right way - to engage with and retain their customers by providing the ultimate personalised experience. Building a clear understanding of your customers as individuals as well as how they fit into your target demographics, from clean, consolidated data is the only way businesses can provide truly outstanding, tailored services. Disruptors are already taking advantage of their agility and efficiency in their use of data sources to disrupt industries all over the globe, and the loyalty and value these positive customers experiences generate cannot be underestimated.
The challenge now is this: can organisations help to build trust and commit to using data for the good of the customer? The technology has been around for ages, but it needs a cultural mind shift that sees data as an extension of an individual identity and not just a commodity.
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