In a recent poll taken at a debate organised by the Management Consultancies Association, two-thirds of the audience agreed with the proposition that digital is “as significant as the industrial revolution”. While this is open to debate, and for the record, I’d agress with the claim, the fact is digital has revolutionised business and generated vast amounts of data in the process.
However, simply having data usn’t a guarantee for success.
In our joint report with eConsultancy, entitled Delivering Value in the Data Exchange, we investigated the complexity of the data landscape, and the growing shift towards smart data for marketers.
Smart data has been defined as a product of Five Cs:
• Centralised in the organisation (virtually if not physically)
• Clean (accurate and valid)
• Contextual in the light of wider customer insights and behaviours
• Collaboratively acquired between consumer and company
It may be hard to forget volume, velocity and variability, but the debate around ‘big data’ is thankfully moving on from whether it exits (it does) to the more interesting aspects of what data can drive consumer and business value; this data can be thought of as ‘smart data’!
Generally speaking, smart data comprises two parts. Ideally, we’re seeking the combination of relatively static but still evolving data sourced direct from the individual customer around who they are and dynamic data gleaned from interactions both on- and offline.
Dynamic data is a function of numerous sources from cookie management, transactional data, click rates and the like, typically data about what someone does. While this data can help deliver a better experience in the moment, on its own, it’s not particularly strong in understanding the wider needs and context, much less anticipate what they might be in the future. You only need look at the archetypal example of Amazon’s early ‘You might also like…’ function that serves a grandmother a never-ending supply of PlayStation suggestions based on a one-off birthday present purchase.
Equally, static data while pinpointing the individual is just that – a static snapshot of a point in time. To combine these two streams and create truly smart data, brands need to seek extra information from their customers. This enables them to serve individuals efficiently, increasing trust between consumer and brand.
In eConsultancy’s Consumer Personal Data Survey, 43% of respondents said it was sometimes worthwhile sharing personal information while 14% said this was true most of the time. Only 10% felt it was never worthwhile (see Figure 1 ). It’s clear consumers are awaking up to the power of their digital footprints.
When data is smart, it helps the customer realise how providing information to the organisation will ultimately improve the customer’s own experience and provide them with information tailored to suit their preferences. Indeed leading brands are increasingly making clear to customers, in plain, simple terms not complex legalese (thought that’s still there if you want it), exactly what’s in it for both parties.
The element of distrust is slowly evaporating and leaving behind a new reality where customers are willing to share information if they are likely to get value in return. In truth, smart data is breaking down the barriers between brands and consumers. What was once treated with suspicion can now connecting brands and consumers, this is the power of smart data.