How much is your personal data worth? It’s a question few have likely considered, and far fewer can answer. But data, after all, is capital, and as the lines between our digital and physical lives blur, the rails of the data mines burrow deeper, and self-awareness of consumer value grows.
To get to the bottom of this quandary, loyalty marketing and data analytics behemoth Aimia surveyed 15,000 consumers worldwide, in an attempt to quantify exactly how much monetary value they apply to their personal data.
Some 41 per cent of UK consumers regard their personal data as “highly valuable” – a hike of 12 percentage points in two years. “The central driving force behind the increase,” says David Johnston, group chief operating officer at Aimia, is that “over time, more consumers are becoming aware of the data trail they leave. They’re becoming more aware that their data trail has value for companies, and subsequently, potential value for them as individuals.”
Aimia is a loyalty data tour de force, best known for Canada Air’s hugely successful Airplan and its acquisition of the Nectar card scheme from Sir Keith Mills’ Loyalty Management Group in 2007. In the past Aimia was the owner-operator of its various schemes, but now runs a standalone loyalty service operation. “We took everything we know about the strategy and execution of loyalty, and use our own proprietary technology tools to help banks, retailers, airlines – whoever – to run their own loyalty programmes, under their own brands.”
As a business dealing with swathes of personal data, Aimia wanted to understand how its customers felt about it. “Clearly a central question for a business is the value of data, and how customers feel about data privacy and personalisation. We felt a few years ago, rather than just talk about this, it would be nice to have some numbers, some substance to our point of view,” says Johnston.
The report found that UK consumers value their personal data considerably less than their counterparts stateside and down-under. Data such as their browsing history, online purchases and contact information were valued at an average of £20 a year, whereas personal information such as name, nationality and date of birth were even less, at £10.
Much of the value consumers apply to their data is borne from the data/ value exchange – that is, getting a relevant personalised service in return for giving up their personal data. Johnston’s view, based on Aimia’s survey, is that consumers’ expectations are rising. “I think that the industry – in the main – hasn’t yet fulfilled the real promise in personalisation,” he says. “I think consumers are saying to companies ‘look, I know you get my data, at least have the courtesy and wisdom to do something useful with it.’”
Robbed of scale
He believes that the scale of global business diminished its ability to offer a truly personalised service, and that “even the companies who still knew you by name – your bank and phone company – treated you like a number and not a person.
“When the first corner shops opened they were box-sized, and the guy who ran the shop knew everyone in the neighbourhood by name. He knew who to give credit to, and who not. What products would promote well in that area, and what wouldn’t. And who were the absolute best customers and therefore deserved the better cut of meat. Scale robbed business of the ability know their customers by name,” he says.
Aimia prides itself on providing value through personalisation, using five principles, or “data values”: tact, transparency, added value, control, and trust.
“We’re very open with our card holders and clients about what we’re going to do with their data... we’re collecting it because we’re going to add value back to the consumer – they very clearly get something for it. As for control, if the consumer wants to switch it off, they can. If you think about Nectar, you just don’t use it, you take it out your purse. It’s a very transparent exchange.”
Johnston believes that as awareness grows, marketers are “perhaps a bit too focused and excited on what they can do to consumers, rather than what they can do for consumers. To stay ahead, they need to create “better experiences for consumers based on what they really want, rather than just thinking ‘oh brilliant, I have a database of another 100,000 names, I’ll fire something at them.’
“I think that’s why models like Nectar are successful,” he says. “You’re sort of joining a club – you know why you’re in it, what you get from it, and you get benefits from a number of different partners – it’s rich personalisation that people are prepared to participate in.”