The open data revolution – when will companies wake up and smell the coffee?
It comes as no surprise that public sector agencies globally are striving to ensure the transparency of the data they collect about the citizens they serve. In the words of a US government official, as quoted by McKinsey recently: “All of this data belongs to the people. We created it while we were working for them. The challenge is to make it available – and not just available but intelligible.”
The public sector works hard at transparency firstly because the community expects it but just as importantly, to support citizens by giving them the means to make informed decisions for themselves. I touched briefly on this point in an earlier blog post this year, ‘Transparency is the new currency in marketing‘.
Elaborating on that, I find it hard to understand why so many commercial organisations are not yet adopting the open data revolution more urgently. I believe doing so surely offers disruptive potential in terms of creating better customer experiences and stimulating longer-term customer loyalty.
To quote someone in the private sector this time – the innovative CMO of a telecommunications company – who told me: “While providing customers with direct access to our intelligence might result in some of them downgrading to less valuable plans, I’m convinced it will influence the experience and hence retention in such a positive way that we’ll see higher lifetime value from those same customers.”
This company created digital self-service applications that would expose very detailed call transaction data to customers, allowing them to visualise and drill down into the minutia. The applications use recommendation models and triggers to inform customers about the plan structures most suitable for their current behavior and transaction patterns. I have also seen banking organisations starting slowly to work on similar applications in their internet banking environments, to allow their customers to explore and analyse their transactions more intelligently.
In the financial sector a number of third party companies have arrived on the scene to give banking customers the ability to export their personal banking data to their smart applications in order to analyse and explore their options. I have to say that if I was a manager in a customer-centric bank I would fight very hard to keep those capabilities within the boundaries of my own customer relationships and not allow that capability to drift to a third party. Not only would I regard it as very important to have my own brand identified with that kind of transparency and digital innovation, I know I would also greatly benefit from understanding the interaction with the self-service application to drive new products and services into the market.
This not only applies to banking and telecommunications, of course. Think of retailers strengthening the loyalty of their customers by allowing them to analyse their spending patterns, make smarter in store decisions and closely manage their personal shopping habits and needs against their financial position over time.
Can the open data proposition be taken a little too far? It’s a debatable point. Some organisations are choosing to ‘monetise’ their customer information by making parts of their data-driven marketing eco-system structurally available to sell to third parties. This is an ostensibly attractive trend because it holds the promise of incremental revenue streams that didn’t previously exist. I would argue, however, that by monetising their data – by allowing a digitally savvy and analytically mature generation of customers to make intelligent, data-driven decisions regarding their relationship with the organisation – companies reach into the potential of monetising their data in an even more significant way.
If, like me, you sincerely believe that transparency is an important marketing currency – and while this evolving open data paradigm might lead to challenges in the short term – I think you will agree that it’s the better way to monetise your data in the medium to longer term.