Customer World

Last week Facebook's Chief Privacy Officer - Stephen Deadman, wrote about the need to refocus the debate around personal data. It was a thought provoking article where Stephen talks about the need for a kind of a new coalition between tech companies on the use of personal data.

I had also written the week earlier on my blog on the trends that I saw - Transformation of software vendors as data vendors. As I read  his piece, some interesting thoughts, challenges & framework to use personal data came to my mind. It also needs a variety of stakeholders - policy makers, governments, tech companies and citizen groups across the world to come together.  Also, Doc Searls and Dan Mitchell who I follow, added a lot of perspectives around this topic and the initiatives that are being undertaken. 

The key issue that came to my mind was, who is more empowered today to use personal data and who is the owner of personal data. I strongly feel, the individual is highly dis-empowered today when it comes to use of his or her own personal data. Very often, I find tick boxes, check boxes, cookies that outlines all kinds of T&Cs  that we literally have no control of this data. Also, the way marketers treat this data, is purely in terms of economics and there is no strand of trust, whatsoever. It represents an unequal relationship, an accelerating decay of distrust for the individual when it comes to her personal data.

When it comes to personal data, the internet has disrupted national boundaries. The data individuals leave behind, for example in Uber or Amazon or Facebook or Google or Apple to put it mildly is subject to interpretation on ownership. When it comes to offline identity, governments have found a solution with Social Security numbers  or Citizenship or the like. But, when it comes to personal data, the rules are however archaic.

The coming of a Data Passport Era

There is a need to build a ecosystem by linking offline identities of individuals thro' what I believe will look like Data Passports. This will be fundamental to building a data coalition that Stephen talks about across companies. Data Passports are an equivalent of Data Vaults that will be owned by the individuals against their passports, mobile devices, broadband connections, banking relationships etc. etc. Data Passports will have streams of an individual's personal data. This massive repository will have links to personal data of individuals and will be classified with specific lifestyle and usage behaviour tags. Like ICANN, there is a need for a non-for-profit organization - called DCANN( Data Corporation of Assigned Names & Numbers) which will be linked to the massive Data Passport APIs across various countries & personal data passport vaults.

This data passport vault, which will be owned by the individual along with other identities, will have permissions from individuals to share specific strands of data for mutually beneficial economic and social value. This kind of a data passport platform will then be shared amongst companies & governments to derive value thro' mutual exchange of trust.

This is a long journey that needs to be taken to empower and give the control back of personal data to individuals themselves. It needs a new kind of data coalition that calls for collaboration, sharing, flexibility and mindset change across borders, governments & companies to enable this. 

I often hear a lot of businesses and managers talking about a metric Cost-to-Serve(CTS) - reducing cost-to-serve a customer. They continuously talk about moving customers to lower cost channels and hence reducing the cost-to-serve & improving profitability. I find this ridiculous as an independent metric measured by businesses.

Let me explain you why:

What does Cost-to-Serve(CTS) mean?

Currently, if a business is using high cost channels, resources to service customers and hence it eats into the  profit margin of the business. Hence, the managers & leaders in the company are mandated to move customers to lower cost channels so that it is a self-serve channel for the customer and minimizes resources from the business's end.

Let me now look at it from a customer's point of view - What is Cost-to-do-business(CTB)?

I reached out to my service provider thro' the phone( a relatively lower cost channel) and spent about half hour explaining my problem to the associate on the other side of the phone. I was told that the problem will be resolved in 24 hrs and that they were transferring it to another technical team who will address it. I waited and nothing happened - no response or no resolution was in sight. I called my service provider on the phone again and this time to my horror, I had to repeat the problem all over again for another half hour. Here's one hour of a customer's time that has been wasted by the company -that's pretty precious, in my view which businesses give a damn, as it does not cost them anything.

I also emailed the problem I was facing, to put things in writing to customer service - which took me another 15 mins and then there was a spate of automated mails that were generated promising resolution within further 2 working days! Now, I had lost close to 72 hours in addition to an hour over the phone. Now, the web channel again was a low cost channel to business but it was a high cost-to-do-business for me, as a customer, as nothing was resolved. Neither, the channels were integrated to treat my problem on priority given my prior poor experience. The Cost-to-do-business with the company was too high for me, as it was eating into my time and effort - that close to 73 hrs and 15 mins( 72 hours of lost opportunity and 1 hour and 15 mins of interacting with them over different channels). How does business pay for these costs and factor for these?

Many of the financial services companies who I do business with, have asked me to move to e-statements, mobile app, online banking etc. Now, I am increasing my storage space on cloud to factor for these and storing them as if I ask for an e-statement beyond a year or so, then they charge me for it. However, none of these businesses have optimized the charges they debit to me - as earlier they were sending me all of these and providing services. Now, all my online fund transfers are charged, my POS transactions on debit card has increased but my debit card annual fees is not reduced, it is the same as I had paid couple of years back! Since, the time I moved to online & mobile banking, am not visiting their branches which saves them a lot of money as they have reduced their cost-to-serve me. The cost of doing business- CTB- with my bank has in fact increased for me - If I factor my time and transactions charges that I pay to them.

I believe there is a balancing metric that companies need to look at -which is Cost-to-do-Business(CTB) for the customer while they look at cost-to-serve metric. For my bank, if my branch visits have come down, if my ATM transactions have reduced & POS transactions have increased or my problems with my utility service provider is not resolved over phone, web channel etc. the cost-to-business in fact has increased and they must pass on the benefit.

It's time for business to think from a customer's point of view and then factor for these as customer migrate to newer channels & touch points. The cost-to-do-business(CTB), then it is to be tracked as a metric and differential value of benefits passed on to customers too.

I have been reading a lot of interesting developments about IoT(Internet of Things) and some recent trends on the kind of devices that will pop-up soon to influence a customer's life which were showcased in CES 2016. I often wonder how ready are enterprises to transform themselves in a way to anonymize this data yet deliver compelling customer experiences.

I came across this lovely article in HBR on "Customer tracking can work without being creepy". Smart CRM as HBR puts it, talks of some interesting steps that companies need take to balance data being collected & not getting too up-close & personal!

There is a very big difference in companies controlling the data and allowing customers having control over their own data. When customers feel value is being created in their interactions with the company using this data, then there is no issue. The key question here is - "Definition of Value". The irony here is what companies think is value out of this data for them, may not be valuable to customers and value may be different across different customer segments & types. Companies need to understand the concept of "value tiering" when it comes to managing individual customer relationships and using this data out of these devices.

The importance of mapping customer journeys with this data is a critical component companies need to develop quickly.The need to have a "Pilot & learn" mindset is critical. Mapping end-to-end customer walk-thro's and discovering 'data-holes',  is a good way to create previously impossible customer experiences now enabled thro' such IoT devices.   

There is also a huge need to integrate "Brand values" with "Data lakes" that are getting created due to IoT devices. If you were a bank, which  focuses on efficiency more than convenience, then the " data experiences" have to be linked to those brand values. However, if  you are a retailer focusing on "Intelligent Shopping", then how will these devices & data deliver similar values need to be worked on. Amazon's dash button is a great example of this. 

IoT devices have the ability to create 'data overload' and can lead to 'Relationship Tripping' - companies must learn to use it selectively, effectively and intelligently. They need to develop their own IoT vision and have a clear road map of which customer experiences would they like to influence and drive value will be important.