Value of Data
A subject being debated at the moment at the DMA (I sit on the DMA North Council) is the value of data.
Brands have had a place on the company balance sheet for a numbers of years now. One of the most influential measures of the value of a brand comes from Interbrand who define brand valuation with three key components: The
Financial performance of the branded products or services
Role the brand plays in purchase decisions
Brand’s competitive strength.
So why not data on the balance sheet?
Should we place a value on the size of the database, or the customer details it holds, or an organization’s capabilities in using it. In my world of CRM it is second nature to place a value on an email address or a customer’s lifetime value. Value can also be derived from the CRM data itself to generate sales as anyone who received easyJet’s anniversary email from a couple of years ago would remember or who get the Trip Advisor email informing you that you are in their top 10%.
Of course, value can also be viewed in another way. With the recent GDPR coming into force, organizations need to understand the implications of not having their data and systems in order. Data breaches are getting bigger and bigger (Are you one of the Facebook 50 million?)
No matter how you value it, data is the lifeblood of most organizations.
Which then suggests we need to answer the question as to what is the value consumers should place on their data?
We all know that there is no such thing as a free lunch, and that the so-called free services we get from Google, Amazon, Hotmail come with a hidden cost. Whether we realize or not (and we do realize it don’t we?), there is an exchange taking place. We get free search/email/shopping experiences in exchange for our data. This exchange is vital to the economies of the aforementioned brands. Its estimated that Facebook collects $240 from every American adult. This estimate was made by Wibson, a decentralized data marketplace that provides individuals a way to securely and anonymously sell validated private information in a trusted environment.
So, what if brands changed their model and put a tangible price on your data. Not so far fetched. Shiru a Japanese coffee chain provides free drinks to university students in exchange for personal data that they share with companies interested in hiring those student. In fact, according to Shiru’s website ‘We have specially trained staff members who give students additional information about our sponsors while they enjoy their coffee’’
Who would have thought that one pillar of the cashless society would be one in which the exchange of data would play a part