Is big data shrinking customer engagement?

• Author: Hall, Robert
• Position: MARKETING SOLUTIONS - Column

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 Survey last 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 smart phones, 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 is the recent IRS targeting of 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).

Trust and data

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...