There is a fundamental shift in attitudes towards privacy. Consumers know they are surrendering their data, and are willing to surrender privacy. But they treat it like cash: They want something in return.
So argues Dimitri Maex, Managing Director of OgilvyOne New York, the digital direct arm of Ogilvy & Mather, in his just-released book Sexy Little Numbers. As OgilvyOne describes Sexy Little Numbers, it "shows how to grow your business using the data you already have."
"Despite the handwringing that has accompanied the age of 'Big Data,' our research shows that 72% of US consumers are, in fact, willing to share data – they just want to receive fair value in exchange," said Maex. "This finding indicates a fundamental shift in the data privacy debate – and even in attitudes towards privacy – and foreshadows opportunities for those companies that figure out the value consumers place on their personal information. These forward-looking companies will have the edge as they are able to develop offers and incentives that draw consumers into more intimate relationships with brands."
Three Types Of Fair Exchange For Data
Maex describes three types of value exchanges: rewards and monetary benefits; better service; and transparency and control in data usage. Some distinct groups are emerging:
- The "Cash for Information" consumer: typically young professionals, 94% of whom will share information in exchange for monetary benefits;
- The "Privacy Cautious" consumer: typically older consumers, 41% of whom will share data such as their telephone number in exchange for better services. This number increases to nearly 50% among retired respondents;
- While 52% agreed that a cash reward was the most preferred exchange benefit, "Affluents" (those earning over $150k) were more interested in receiving exclusive deals/discounts on products & services (51%).
Maex's attempts to decipher which data is the best to track, how to extract the storyline it reveals and where companies can find untapped profits.
"Before the digital age, it was fairly simple to target customers using direct mail and traditional customer relationship management (CRM) techniques. Today, with every customer move transparent, the huge quantity of data that is now easily available gives companies an unprecedented window into how customers engage with brands – and more importantly – where that can lead to revenue," said Maex.
Big data can be overwhelming. For example, how can you sort through all the mountains of information to find out why a customer bought your product? Maex describes some best practices in Sexy Little Numbers:
- Predict what your customers and potential customers will be worth to you in the future using the models once restricted to the data elite such as value spectrum and risk propensity.
- Find where your customers are, both geographically and online, what sites or social networks they spend their time on, what apps they use and what they are searching for.
- Determine which customers buy your product because it is perfect for their needs, which ones buy it because they liked your ad, or which ones decided based on price. Find out if the purchase came from word-of-mouth recommendation.
- Discover how to allocate your marketing assets in ways that will generate the highest possible returns.
- Optimize your sales and marketing efforts using the latest technology.
Dimitri Maex is managing director of OgilvyOne New York, and also serves as the head of the company's Global Data Practice, a team that has been recognized by Forrester Research as number one in the industry. Renowned for statistical methods he's developed, Maex has helped companies including GlaxoSmithKline, IBM, Philips, Siemens, UPS and Unilever find new uses for their data analysis.