Why smart companies will start giving data back to their users

If you’ve been to a marketing conference in the last few years, you’ve probably heard how data has become the new oil of the digital economy. Many companies are accumulating their stockpiles of this new digital fuel via loyalty programs, web analytics tools, and CRM systems.

But all of the data magic happens “behind the curtain.” Consumers don’t see the automated marketing wizard pulling all of the levers. You may sense an advertisement or marketing offer has something to do with your recent browsing or search behavior, but you’ll never see the actual algorithms or business rules that generated it. The lack of transparency in these data-driven marketing scenarios has contributed to the sense that consumers are being stalked by companies. It has inadvertently introduced an unwanted creepiness factor between brands and their customers. Rather than letting data push brands and consumers further apart, how can data bring them closer together? The answer may lie in sharing and not just taking.

Giving Data Back to the Consumer

Customer data should flow both directions as both an input and an output, forging a potent data loop that is mutually beneficial to both companies and their customers. Let me explain what I mean by this.

I recently caught a small glimpse of the data loop’s potential when I received an interesting email from Pandora Radio. I’m an avid user of their online music service, and they regularly send me various promotional emails. Often these emails feature different artists or upgrade offers, but the one that caught my attention was a monthly email that shared three simple data points:

1. How many songs I had listened to the previous month (214)
2. How many songs I had given a thumbs-up rating (6)
3. What my favorite music channel was (Thievery Corporation)

Besides these three insights, there were no fancy charts, just a question — “What will you do this month?” — and a prominent “Listen Now” button. I was intrigued to see data at the heart of this particular email communication. You’ve probably seen LinkedIn’s website do something similar when it shares stats on how many people viewed your profile or how many new people are in your network. In both cases, these companies shared personalized data that their users wouldn’t necessarily have access to. I think they’re onto something that could benefit more businesses.

Data sharing between companies and their customers isn’t an entirely foreign concept, but it has been primarily reserved for customer-service interactions. I’ve received data-centric alerts from my bank when an account balance was low or my mobile provider when my family was about to exceed its data usage limit. I regularly access account information on various self-service websites where I can scroll through rows of tabular data. In most cases, the data hasn’t been proactively analyzed with valuable insights visualized and packaged up for my benefit. Traditionally, data sharing hasn’t been viewed as a way to strengthen customer relationships or generate a competitive advantage. Essentially, it’s a means for deflecting customers from using more expensive, labor-intensive channels (mail, call centers, in-store customer service, etc.) and nothing more.

By imparting valuable data insights to their customers, companies can strengthen relationships, avoid attrition, and increase product/service usage. The data geek in me started to wonder what other numbers Pandora could have shared with me that would have added value to our relationship. Pandora could have given me more detailed information on my top artists, music genres, or sub-genres to help me in my quest to find new music. It could have shared my listening patterns over time and benchmarked them with those of average Pandora users, which would help me appreciate how much I rely on the service. Clearly, there’s still untapped potential in Pandora’s data that the music service could use to engage more of its users.

Just like informed marketers make better decisions, so do informed customers. An automobile maker could monitor driving behaviors and share tips on how you could become a better driver (e.g., you rarely use the sixth gear when you should be, which will conserve x% more gas). A software provider such as Adobe could report on which features a user touches, how it compares to other users, and share how-to videos for those areas that aren’t being used. In both cases, the product user is enlightened and the company benefits from the positive halo effect created by proactive data sharing.

As you look at the data you’re collecting from your customers (or could be collecting), what types of insights could be shared with your customers? How could they benefit from these insights? How could your company benefit from sharing more information? How would it differentiate your brand or products from those of your competitors? Opening your eyes to the possibilities of data sharing will help you unlock even greater returns from your customer data.

Data sharing isn’t without challenges. It may expose weaknesses or problems you don’t want your customers to see. Some companies will be perfectly happy to keep their customers ignorant of how inefficiently they use or misuse their products or services. Too much data can also confuse customers. Companies will need to be selective about what data they share, how they share it, and how often they share it. Identifying key metrics, leveraging effective data visualizations, and choosing the right cadence will be critical to your data sharing success. Organizations will also need to determine which channels are best for sharing personalized data — text messages, mobile apps, emails, websites, in-product, etc.

Unlike fossil fuels that have a finite supply, data is an unlimited resource that will only expand with the emergence of the Internet of Things (IoT). As data becomes more pervasive, a healthy data loop with brands will be expected and rewarded by increasingly data-savvy consumers. It’s no longer just about how your company can extract valuable insights from your customer data, but how the data can create value for your customers. It’s time to start planning how your firm can embrace the bi-directional sharing of information and master the emerging data loop.

Brent Dykes is the Evangelist for Customer Analytics at Adobe and is responsible for guiding and evangelizing the vision of Adobe’s analytics solutions. He has been focused on enterprise-level web analytics consulting for eight years, working with many industry leaders, including Microsoft, Sony, Dell, Comcast, and Nike. Dykes is also an author and recently published his first book, Web Analytics Action Hero, which outlines how to become a successful analyst who drives action from digital data.

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