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When customer data is cheap enough to waste, we're in Hotel California. But here's the way out...
Cheap enough to waste
Whenever a business needs more customer data, they can simply fetch it with an API. Tap up the latest '360 view of the customer'. Or hit up some 3rd party data broker.
And in the darker corners of the web, they can just mash together the results of the latest data breaches.
Within our businesses, and right across the digital economy, customer data is treated like it will be available, and accessible, forever.
It’s seen as an abundant resource.
Years ago Clay Shirky wrote that when something becomes abundant it becomes 'cheap enough to waste'.
And that’s exactly what's happening today with personal data.
We’re wasting it.
The reality is that once customer data is captured and stored inside a business, there’s a half-life to its value. It degrades over time.
I’ve said previously that ‘CRM is where data goes to die’.
Ask yourself: how much customer data do our businesses collect? And how much is actually used? How much value is really created with it?
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A scarcity of data
But a change is coming.
We’re about to trigger a movement towards LESS data.
Once customers have new digital tools on THEIR side, we'll see a massive shift in the data collection game.
For example, 'Zero-Knowledge Proofs' (ZKPs) will mean that businesses can ask for facts ABOUT the data, rather than FOR the data.
Think about that for a second.
The data itself can remain with the individual. But a verifiable answer about the data can be shared easily, perhaps with just one tap.
The business can still be assured where the data came from, and to whom it was given. And still even check if it was tampered with or revoked.
But in many cases, businesses won't need to ask for the underlying customer data at all.
Imagine the impacts on digital customer interactions. Fewer lengthy forms. No more typos. No more copy/pasting personal data from site to site.
Instead companies can ask customers some simple questions, requiring only a 'Yes' or a 'No' in return.
Think of it like playing the popular board game 'Guess Who?'... where players only get to ask each other Y/N questions.
So instead of
"Are you wearing a hat?"
...it will be
"Are you a loyalty card holder... and are you over 18?"
It's going to revolutionise customer data collection.
Back-office databases will become full of ‘Yes’ and ‘No’ fields… rather than storing the raw customer data (which becomes ripe for a data breach).
Instead, the business becomes more compliant, more efficient, and less attractive to hack.
Fewer data protection issues. What a dream for Chief Compliance Officers everywhere.
More broadly, the arrival of digital customer tools and ZKPs will also disrupt the customer data supply chain we rely on today. And that includes the many 3rd party data brokers currently rent-seeking on ‘personal data profiles’ today.
The whole market will shift from an abundance of customer data... and will start treating it like it’s a scarcity.
Something to be treasured, looked after and valued.
Less is more
The knock-on impacts on digital customer relationships are even more profound. Because when it comes to customer data, less really can mean more.
But more privacy.
All whilst offering better and faster customer experiences and streamlined interactions.
It’s a win-win.
If that’s not the basis for a long-term sustainable digital customer relationship, I don’t know what is.
Today every website and app is living out the same customer data (over-) collection story, over and over again.
It’s a personal data Hotel California.
But soon, these Zero-Knowledge Proofs and new digital customer tools might just give us a fighting chance to leave.
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