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You cannot forget what you cannot remember

December 11, 2013

In order to forget something, first you need to remember it. That simple premise will cause organizations a great deal of pain as consumer privacy legislation takes effect. 

The concern about consumer data privacy is at an all-time high. Forrester reports that 70 percent of Europeans are concerned about the reuse of their personal data. According to Susan E. Gindin's report "Perfect Storm for Behavioral Advertising," 86 percent of Americans are concerned with data collection from internet browsing and how it is used to generate personalized banner advertisements. Their primary concern is how that data may be used for other purposes, or packaged and resold to other entities. With data breaches and issues such as the NSA’s collection of private data making headlines each week, it’s no wonder that consumer sensitivity is heightened. 

This will present a very large problem for companies, because law makers are starting to take action. The European Union announced changes to the 1995 Data Protection Directive to take effect starting in 2014, according to Forrester research. It contains one very logical and innocent looking directive, “the right to be forgotten,” which means that upon request from a consumer, an organization must delete all of their personal data. That sounds simple, but it’s actually a wildly complex problem, because of the premise above: you cannot forget what you cannot remember. And most organizations aren’t particularly good at remembering their customers. 

Organizations have experienced this before. The wave of privacy opt-out regulations and do-not-call laws in the early 2000s highlighted that they lacked a single view of their customers. It also drove a wave of investment in technologies, such as master data management, to assemble that view. One insurance company was fined for not complying with a consumer’s opt-out request. Consumers expected them to be one company, but in reality they were five silos. So while they tracked an opt-out in one silo, they didn’t share it with the other silos. That led them to build that enterprise-wide “true customer view” with master data management, to manage privacy opt outs, but also to improve customer service and ultimately marketing and sales processes. 

That issue only dealt with structured data—it necessitated the identification of unique client records and tracking their opt-in and out preferences. The right to be forgotten is far more comprehensive and challenging. It involves all data, structured and unstructured, that is related to the customer. Unlike the past, when we could put structured data into a database to generate a compliance report, now it will be impossible to adopt a quick and dirty compliance Band-aid. There is no fast way to find and relate all big data for a customer; the complexity of unstructured big data means that organizations will need modern technology to build that enhanced 360° view. Organizations will need a combination of master data management and big data technologies. MDM will form the foundation, matching and resolving unique customer identities and storing structured customer data, as well as the links to other structured data repositories. Big data technology, such as federated search and navigation, will find and index all unstructured sources of data related to that customer record: PDF documents, application forms, call centre interactions and sentiment, and website browsing statistics, to name but a few. Only with the enhanced 360° view will organizations be able to remember, and then forget their customers, if requested. 

Aside from legislation, and the need to forget your customer, there are other very compelling reasons to build an enhanced 360° view. It will help power service processes and allow organizations to better understand customers and interactions across all of their channels: phone, internet and mobile. It will help to market and sell the right offer, at the right time, to the most valuable customers and households.  Research shows that most organizations utilize only about 20 percent of their available data. An enhanced 360° view helps organizations tap into 100 percent of their data. That could make them four times more effective in knowing their customers and actively building relationships with their best customers. And there’s one final reason to consider finally solving that age-old problem of truly knowing your customer: consumer power. Heightened consumer sensitivity to data usage has forced the consumer to be more aware of a company’s data handling and sharing policies. The ability to handle data securely, to know where data is, and to forget it if requested, will become a competitive differentiator. Consumers are waking up to realize that their data is an asset, owned by them. Organizations who are the best custodians of that valuable asset will yield a competitive advantage attracting and retaining customers.

Learn more about Building an Enhanced 360° View of the Customer today.