Business executives are unprepared for the 'Golden Age' of anytime, anywhere, free-for-all access to customer data coming to an end as soon as 2018, according to a recent online survey by Ernst & Young (EY).
While nearly half (49%) of responding consumers appear willing to restrict the amount of personal information they share with businesses over the next five year, the majority (71%) of executives are not preparing for a future where access to customer data is no longer free to be captured and leveraged for commercial purposes.
The online EY survey of over 2,000 consumers and 748 senior business decision makers examined changes in consumers' attitudes toward personal data sharing, and the actions businesses need to take to adapt their customer insight programmes as a result.
The research revealed that 48% of senior decision makers are currently reliant on consumer generated data interaction that could include data, through interaction such as social media, web browsing behaviour, previous purchases and ad-clicks, to boost brand advocacy and grow revenues. Despite this, few organisations are preparing for a future where consumers start to restrict access to their personal data.
The importance of free data
Both businesses and consumers recognise the monetary value of customer insight programmes. Of those businesses that use customer insight programmes, 79% believe that it boosts revenue and 25% of senior decision makers surveyed think that it increases revenue a 'fair amount' or more.
Consumers share a similar view, with 78% agreeing their data enables companies to make more money. As a result, consumers are becoming increasingly selective about who they are willing to share data with. In total, nearly half (49%) of consumers admit that they will be less willing to share personal information in the next five years.
"Today's customers know the information that brands are collecting. Everything from web browsing behaviour to social media and interactions with the brand can be used to improve business processes, decisions, customer experiences, and identify competitive differentiators," explained Steve Wilkinson, EY's managing partner for the UK & Ireland. "But many customers have recognised that businesses are using their personal information to help grow revenues, and are starting to withdraw access to their private data."
Preparing for the Big Data backlash
Regardless of the increasing number of consumers who are less willing to share information, only 20% of business executives are concerned that customers will start to restrict the use of their personal information by companies in the next five years time. A further 28% of business executives don't think that the amount of free information that customers are willing to share will change, whilst 29% admit to not knowing whether more or less of the personal data sourced from customers will be provided for free.
"Companies are at odds with consumer attitudes when it comes to the collection and use of personal data. There appears to be a laissez-faire attitude among business executives when it comes to how they might collect and use customer's personal data in just a few years' time," warned Wilkinson. "Instead, companies must realise that a backlash is building among consumers who are no longer willing to share their personal data and starting to restrict the information they provide to companies."
Incentivising data sharing
As customers start to restrict access to their personal data, 41% of senior business decision makers admit that it would present a risk to their existing business model and revenues. Despite the importance of customer insights to a business and its operations, 76% of senior business decision makers still say that their business would not be prepared to incentivise or pay customers for direct access to their personal data. This highlights the stark contrast in the way that businesses and consumers view private data sharing, 40% of consumers agree that they would be more willing to share personal data with companies if given an incentive to do so.
The future of customer insight?
When asked whether they collect, deploy and interpret customer information that allows them to acquire, develop and retain their customers, 62% of businesses say they use customer insight programmes. However the longevity of such schemes could be at risk, with just 2% of consumers believing they will be more willing to share personal data in five years' time, and 25% of senior decision makers admitting they do not even know what is likely to be the main source for their business to obtain consumers' personal data.
"Many of today's businesses are reliant on customer-generated information as an important source of data for customer insight programmes. With companies investing large sums in developing their capabilities to gather customer information as part of Big Data strategies, organisations need to start reviewing existing schemes to future-proof investments after the Golden Age of free information comes to an end," concluded Wilkinson.