Is Big Data Shrinking Customer Engagement?

Russia’s agency responsible for the Kremlin security is buying typewriters – a move reportedly prompted by recent leaks by WikiLeaks and Edward Snowden. — BBC News — Europe, July 11, 2013

A key assumption behind Big Data is that more information and knowledge about our customers will translate into greater customer engagement, stronger relationships, and increased sales. What if the assumption is not fully true — and larger organizations with larger stores of data unleash forces of distrust that diminish customer engagement? What if the rate of customer data acquisition is more than offset by the rate of customer relationship repulsion? The image that comes to mind is a dog chasing its tail — the faster the dog turns, the faster the tail escapes.

Stress over this question might explain a Korn/Ferry Marketing Pulse surveylast month reporting customer engagement as the number one issue keeping CMOs up at night. Their worry is understandable when, according to Gallup, fully engaged customers represent an average 23 percent premium in terms of share of wallet, profitability, revenue, and relationship growth over the average customer. Actively disengaged customers represent a 13 percent discount on the same measures.

News surrounding Edward Snowden’s leaking of classified NSA documents has further educated and sensitized the world to the tracking and surveillance possibilities of Big Data. Diverse sources of data — like transaction, browsing and location information — from smartphones, social media exchanges and third-party data sources such as surveillance cameras coupled with powerful government and corporate scanning capabilities and data bases have shown just how powerful the information is; and, how it might be used and misused. Adding to the concern are the recent IRS admissions that it targeted certain political groups and the ability of store employees to access private information about shoppers. It gets scarier when medical, financial and legal information (think sensitive sexual medical or arrest information) are added to the mix along with projections that might come from data scoring (think credit scores or disease propensities).

Can corporations, government, and their data continue to grow bigger without relationships and trust growing smaller? It is easy to fall in the trap of using an old paradigm to evaluate a new reality. Historically, the gathering of more information was accompanied by growing and deepening relationships. In both our personal and organizational lives more information fed more relationships, which fed more information. So not only did more information make you smarter about someone’s preferences and needs, it also likely built trust and “permission” to use that information. Usually the customer felt a relatively high level of control and if somewhere along the way trust became a concern or the provider offered no value, customers would shut down or limit access and information.

Compare that to how data accumulation has shifted as Big Data has emerged. Increasingly information about us is collected, shared, analyzed and mixed without our permission, and often without our knowledge. It is amazing that a store could discern your preferences, recent purchases, and browsing history while tracking your path and attention in-store and any coupons you are carrying. This exponential increase in information has not been accompanied by a similar expansion of the relationships. In fact, by most metrics, the relationships and engagement with customers has leveled or shrunk. There is something both creepy and pathetic about an unknown watcher with information that the relationship does not warrant — the words voyeur and stalker come to mind. Customer information and depth of relationship that used to be mostly married has become increasingly divorced.

Information that was historically a function of relationship now runs the risk of producing estrangement.

There have certainly been attempts to make information more “permission-based,” by requiring approval for collecting and distributing data and contacting customers. Yet much of the information in-play today is not owned or controlled by the customer and even for the part that is, there is considerable risk from illegal hacking and stealing of information which negate permission and prudent data security measures.

If information is power, then as organizations gain more information they also gain more power and customers may feel more… powerless. Power misused or abused can corrupt, oppress, and thus repel. The big question for customers regarding sharing information: Are providers demonstrating enough value and trust to warrant the risk and nuisance of more data and more engaged relationships?

Is it even possible to keep sensitive data out of corporations or government hands? There’s a reason old-fashioned devices like typewriters are now being used by Russia’s defense and emergencies ministries for document drafts, secret notes and special reports prepared for President Vladimir Putin. This outdated technology has become the ultimate security system precisely because it’s “off-line” and has the unique advantage that documents can be linked to a particular machine. Who knew we would have to pay additional to exit the information highway?

Customers know the feeling — that information sharing has gotten way ahead of our actual relationships and possibly our best interests. They also know that once inside a system, information can be shared immediately, globally and irretrievably. Customers may follow the Russians — looking for ways to bypass the grid so information can be managed within the confines of relationships with confidentiality and control.

It is part of a bigger trend. How many people do you know who have taken a Sabbatical or permanent leave from email, Facebook, Twitter, online purchasing or responding to online inquiries? A survey by the brand Chinet reported last month that more than 60 percent of respondents plan to reduce their use of technology and social media in order to engage in more face-to-face social activity with nearly 75 percent interested in hosting more get-togethers. People are using software like Sabbath that facilitates scheduling time off grid.

The challenge for providers is to marry something old and something new: to apply Big Data and mobile devices in a way that earns expanded customer engagement rather than shrinks it.