In his book “Who Owns the Future?” digital iconoclast Jaron Lanier, who was named one of the 100 most influential people in the world by Time magazine and is now a Microsoft employee, once pointed out that people should own their online data profile and be compensated if they choose to share some of it.
It was a compelling argument. Until recently, our global economy had been based around two models of value exchange: the first based on the exchange of goods and services, and then later, the exchange of attention in the form of media and entertainment. Now the rise of digital technologies has added a third construct: data equity. This is data that comes through search engines, social media platforms, loyalty points and other digital transactions, such as dynamic cookies.
But as Lanier rightfully questioned — who ultimately owns this data? And could we reshape a digital society where there was a fairer treatment of the value of one’s data?
This notion of data ownership, or “data as equity,” has become an increasingly loud refrain as organizations collide with private consumer information on things such as with whom their customers communicate, the types of cars they drive, their ages and other demographic qualities, and their shopping habits.
As more deep data analysis is performed by companies to identify trends and insights about their customers’ evolving needs, personal data will continue to become an intensively valuable resource for individuals and for companies if they wish to remain relevant and competitive.
Democratization of data
This shift to data as equity did not start in a vacuum. Many forces led to the rise of this third foundation of value exchange, and three leaps come to mind: 1) Competitive globalization that has required companies to stretch scarce resources and finely tune their products and services for increasingly niche markets; 2) Digital innovations that allow organizations to gather data in real time; and 3) The rise of an educated digital consumer demanding increasingly personalized products.
Before the rise of digital technologies, customer data was worthless to consumers. As customer-targeting technologies initially evolved through online ads and matching search algorithms, companies began to realize the full value of this information. This data could be harnessed to deliver sophisticated web services like matching up a customer’s food preferences with restaurant suggestions and meal discount coupons, or pairing travelers with bed-and-breakfast options in a city where they would be traveling — seemingly for free.
Today, personal data has proliferated, and companies offering these web services have generated unimaginable wealth by aggregating, harvesting, and monetizing customers’ private information. But the legal rules of conduct surrounding its use are only beginning to be shaped, and have not yet caught up with the fact that the wealth has not been shared with those who created the information in the first place — the customers.
Instead, consumers want to participate in this economic movement and earn a share of the profits. The existing equation, in which we sign away the rights to our data in exchange for a free service —is no longer equitable.
Today’s customers are starting to understand that their data could be used for more than enriching these companies — their data can be used as both equity and currency. And, of course, because data doesn’t vaporize when it is shared, it can be owned and traded at the same time.
The right incentives lead to the right predictions
The key, of course, to unlocking the value of data as both equity and currency is being able to provide predictions about the customer based on insight. A customer should be able to receive product suggestions, restaurants recommendations, tasks to be completed, and maintenance needs. But the value comes in knowing when the customer needs that recommendation, where they happen to be at that time, and in what context they need it.
This has traditionally been the role of data insights and analytics, which represent a very large trend for cloud-enabled businesses. However, by treating data as equity and currency, it is possible to create extremely valuable predictive insights.
Microsoft Digital has collaborated with organizations to help them reimagine their businesses and accelerate them on their journeys to becoming digital businesses.
This has included a fast-moving global consumer goods company to reimagine their skin care products based on feedback from their customers. Customers were incentivized to send photographs of their skin to this company in return for a personalized product. The rich data set allowed the organization to create a new skin care product based on real-time consumer market through a consent-led platform. This collaboration combined data identifying product usage, personally provided data, and artificial intelligence algorithms.
In another engagement, an “experience as a service” platform was created with an aviation company to implement an integrated digital platform for travelers. Customers can choose to provide increasing amounts of their data to unlock greater offers and rewards — the more data they offer, the bigger the rewards. They can even choose to provide psychographic data, personal income data, and detailed dream vacation spots to receive more significant targeted discounts and offers.
Create your own micro-revolutions rather than be consumed by them
Today, businesses are grappling with a rapidly shifting economic terrain. Those who understand how to make the shift to an equitable exchange of data between their businesses and their consumers will have a key advantage.
To get ahead of micro-revolutions before they are consumed by them, organizations must have a boundaryless data strategy to operate in this new democratized model of data exchange, and to recognize consumers as stakeholders, not products. They can do this by using data as a strategic asset — shifting from hindsight to foresight. And by deeply understanding and anticipating human behavior, using algorithms, and embracing digital platforms and technologies such as predictable analytics, connected things, mixed reality, and artificial intelligence.
Most of all, it requires fearless leadership to challenge the convention, to rise above the noise, to look left when others are looking right, and to have the foresight and empathy to see through the souls of your customers, by showing up where they are and delivering unforgettable experiences.
Because ultimately this transformation is not about technology. It’s about empowering every person and every organization on the planet to achieve more.