The Personal Data Dilemma
When it comes to consumer data, we strongly believe that there is only one true owner - the consumer - and that's why we're actively building technology that allows consumers to control their data, in exchange for personalised and rewarding content.
But for every company like us, that strives for good practice, there are a handful skipping straight to fourth base with their consumers by collecting highly sensitive information such as personal identification and demographic data, causing major upset and promoting a sense of intrusion and mistrust along the way.
This is the underlying anxiety that fuels the ongoing privacy debate, but why does the mobile industry need to be concerned about the issue of privacy? It turns out there are much less intrusive ways to get the information a company needs on its users.
A 2011 survey by the GSM Association found that a massive 81 per cent of mobile users regarded safeguarding their personal information as very important, while 76 per cent stated that they were selective about who they gave their personal information to. The Pew Research Centre also found that over half of mobile users decided against installing an app when they realised how much personal information was required to run it. Put simply, consumers care about who they give their personal information to and what it’s used for.
Personalised service
Yet gathering personal information from consumers can be incredibly important for mobile companies, especially those hoping to create apps that provide a personalised service, or those looking to implement targeted adverts for marketers. It can also be beneficial for the consumer, with a recent study by Ctrl-Shift, an independent research agency, finding that consumers were actually excited by the idea of being able to get rid of noise and remove irrelevant marketing messages.
But companies can’t just go gathering this personal information without consent. If they want to earn the trust of their consumers, they need to let them know exactly what they’re going to do with their personal information and the reasons behind collecting it – many simply aren’t proactively doing this.
One of the biggest problems arises when companies pass on this information to third parties, usually without the consent of the consumer, and they subsequently get bombarded by unsolicited calls, texts or ads for products or services they have no interest in.
If consumers aren’t sure what a service or app is going to do with their personal information then they won’t be confident in using it, let alone spending money with it. In a 2011 global survey conducted by the trade body, MEF, 27 per cent of respondents cited security as the main reason they don’t transact more on their smartphones, while a survey conducted by TRUSTe found that one in three consumers rated privacy as their main concern when using smartphone apps. Companies clearly need to build trust with their consumers, and the key to this is transparency and control.
The best services ensure that their consumers know exactly how their information is being collected and used, and provide them with access and control over it. We believe our iOS app, dealBoard, is a good example of how this can be implemented well, having received exemplary Control and Transparency ratings in Ctrl-Shift’s research. In dealBoard we actually gather no personal information from the consumer, and with the data we do request, we are explicit and transparent about how it will be used. We also let our consumers see all the information that we hold on them in the form of a word cloud, and allow them to edit it whenever they want.
One of the best ways to gather information from consumers is to just ask them. What may be surprising to some people is that consumers are not actually averse to giving out personal information about themselves; they just need to know what it’s going to be used for and how it’s going to benefit them.
Accurate information
Ctrl Shift found that consumers are realistic about privacy, and will happily share a great deal of accurate information about themselves, especially if it’s non-personal information such as the brands they like or the things that interest them. What Ctrl-Shift found to be important is to provide consumers with some form of immediate gratification, be that through gamified mechanics and/or some sort of reward for their efforts.
Even better, if you can be completely transparent with the consumer and demonstrate that there is a clear benefit in providing you with the information, i.e. you provide us with ‘X’ information about yourself and we’ll help you save money on ‘X’ product, then they’ll be more than happy to help.
In dealBoard, for example, our consumers get to enjoy a gamified brand-sorting task, and for providing us with this information on the brands they like and dislike, we subsequently reward them by showing deals that are relevant to them. Companies from all industries are gradually beginning to catch sight of the benefits this more transparent approach has, with Tesco’s Clubcard Play being one of many. Tesco is hoping to make its Clubcard scheme more transparent and encourage higher levels of engagement from its consumers by developing a range of products and games that provide them with access to their own data and shopping habits.
We’ve moved into an age where more and more business is conducted in the digital domain, and technology is becoming increasingly advanced. The use of smartphones in our everyday lives will only continue to rise, whether it’s using an NFC-enabled handset to buy lunch, Barclays’ Pingit app to transfer funds, or completing micro-transactions in a game.
In a world that has become increasingly concerned with privacy and oversharing of personal data, ill-prepared mobile companies are bound to be left behind as users learn to guard their information.
Most companies' CRM, loyalty and other systems are a 'corporate data asset' that, in most cases, combine the data that consumers are happy for the company to hold, with potentially 'toxic' data, that has often been inferred over many years from multiple sources, with some sniffed from the consumer's ‘data exhaust’. Profiles are inferred, often incorrectly, from that data trail. This 'soup' of data carries a huge risk and, like trying to ‘unmix’ an omelette, cannot be easily segregated. The end result is potentially explosive, and can even become potentially illegal under EU privacy laws, as seen recently with the furore over Google’s change in privacy policy, and the unification of 60 services and their user data under one agreement. Corporate data assets can be de-risked by developing mobile solutions that give consumers control of their data, and providing a framework in which they feel a sense of ownership.
Ctrl-Shift predicts that the market for volunteered personal information will be worth £20bn (in the UK alone) by 2020. Now is the time for companies to form honest, open relationships with their consumers and earn their trust and business at the same time. The mobile industry needs to embrace volunteered personal information, and steer away from generalised inference and intrusion on privacy, just as the other digital industries have been doing so, and pave the way for mutually beneficial business practices in the future.
Henry Lawson is the CEO of nFluence
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