Data Stewardship: It Can Make or Break Your Customer's Trust

You've heard me go on and on about the importance of personal identity management (PIDM), and the principles you'll need to adopt to thrive in a PIDM-enabled ecosystem, for a year now. You've heard statistics like:

  • 44% of consumers have walked away from a transaction on the basis of something they read in a privacy policy or terms-of-use statement.
  • 53% of security breaches in 2012 involved compromised personally identifiable information (PII).
  • Nearly half of US online adults don't even trust their financial institutions to keep their personal data secure.
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Just Published: Forrester's Inaugural Customer Engagement Agency Wave

When we set out to evaluate the new breed of firm that we call "customer engagement agencies," we sent our initial screener to an incredibly long list of firms -- over sixty, in fact! -- ranging from MSPs to digital agencies to management consultancies. We felt that we needed to cast a wide net if we wanted to understand the range of approaches vendors take to customer engagement: how they use data and analytics, the channels they enable with customer intelligence, and how they service their most strategically engaged clients. As the responses rolled in, a hypothesis began to take shape in my mind: The emerging customer engagement agency model hails from two mature markets -- digital/direct agencies and database MSPs -- and, depending on provenance, these evolving agencies take one of two primary approaches to customer engagement.

Turns out, I was on the right track, though the reality is not quite so black and white.

In our final evaluation of 13 vendors in The Forrester Wave: Customer Engagement Agencies, Q4 2012, we did find different strengths and weaknesses depending on legacy business model, but ultimately EVERY firm still has a long road ahead of evolving its people and processes to support CEA clients. We also found, though, that each CEA we evaluated is working hard to connect the dots between strategy, analytics and execution in order to optimize customer experience and profitability. And that can only be a good thing for the marketers and CI leaders who are visionary enough to hire them.

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A Vision For Tomorrow's Consumer Data Ecosystem

PIDM Landscape Wordle

Eighteen months ago, when I started down the path of what would become our body of Personal Identity Management (PIDM) research, there were only a few customer intelligence professionals who gave much credence to the picture we were painting. What a difference a year makes. Today, privacy, data governance, consumer empowerment, and understanding "the creepy factor" are core to the conversations I have with CI pros in both marketer and vendor organizations. 

At the center of those conversations is often the question, "Who are the players in tomorrow's consumer data ecosystem?" We've just published a report, Making Sense of a Fractured Consumer Data Ecosystem, that reviews the strengths and weaknesses of four existing vendor categories plus three emergent business models. These include:

  • Consumer data giants: Companies, like Acxiom, Epsilon, Experian, and Infogroup, that have an opportunity to become consumer-friendly data managers but are at greatest regulatory risk
  • Reputation management providers: Companies, like Intelius and Reputation.com, that could help consumers manage data access but need to focus on their B2C business models to do so
  • Online services giants: Companies, like Google, MSN, and Yahoo, that already have access to highly personal data but serve too many masters
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A New Wave On The Horizon: Customer Engagement Agencies

We've spent a lot of time in the past year looking at how the customer intelligence services landscape is changing. For one thing, it's a heck of a lot more chaotic: everyone from management consultants to systems integrators to KPO vendors is putting a stake in the ground of CI services. We've also seen a dramatic shift in the way some digital & direct agencies and database MSPs are thinking about their most strategic client relationships. This change has been so noticeable that, a few months ago, we actually published research that defines a new business model: The Customer Engagement Agency (CEA). 

It's no surprise that clients and vendors alike are excited about this model. These agencies help elevate customer intelligence within the client organization. They bring attention and focus to the importance of customer knowledge, and they work hard at infusing that knowledge throughout every customer touchpoint. They measure customer value, not just marketing campaigns. And they help clients use CI to answer questions about everything from product development to logistics and resource management. 

But, this is an emerging market — the players are evolving from very different backgrounds; they offer substantially different "value-added" capabilities; and many of them have proprietary methods and models that make it hard to compare apples to apples. 

That's why we've just kicked off a Customer Engagement Agency WaveTM that will publish in the fall. If you're intrigued with the idea of working with a CEA, I encourage you to:

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Personal Data & Privacy – Big In Austin, Big In LA

It’s been a week since I got back from SxSW in Austin, and I still can’t believe how absolutely MASSIVE the coverage of privacy, personal data, and identity issues was at the conference. By my count, there were some two dozen sessions, including the Core Conversation I led, across a range of topics that are central to the principles of personal identity management (PIDM). 

Photo of PIDM Core Conversation courtesy of Doc Searls

Some of the most interesting takeaways from my perspective:

1.       We need a consumer bill of rights that’s defined and ratified mutually by individuals and industry. We need adoption convergence by both groups if PIDM is to succeed in a mutually beneficial manner.

2.       We need more cross-functional working groups that include marketers, policy wonks, technologists and consumer advocates. Regulators are simply not going to be able to address the needs and responsibilities of all parties, nor the practical and technological challenges this massive problem faces today.

3.       We desperately need guidelines and best practices for privacy policies, governance, and acceptable use of consumer data. By and large, most of the marketers and business people I spoke with WANT to do the right thing, but they’re just not sure what that means right now.

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Dear Marketer: The Oval Office Called. It Wants Its Privacy Back.

 Yesterday, the White House released a long-awaited set of recommendations that are focused on helping individuals take greater control of how their data is collected and used for online marketing purposes. It includes what's being referred to as a "Consumer Privacy Bill of Rights."

The language is vague. The timeline to completion is long. The guidelines, for now, are "opt-in" for organizations. All true.

But folks? The glory days of scraping and selling and repurposing customer data are over. The Oval Office has spoken on the issue of privacy and personal data, and its bill of rights is crystal clear: Tell me what you’re collecting, how you’re using it, protect it well, give me a copy, and give me a chance to correct it, delete it, or opt out entirely.

Sound familiar? It should.  

We've written about personal identity management because we recognize that:

  1. Individuals want relevant offers and content, along with all the other great stuff that comes with sharing personal data.
  2. But, they are worried about privacy, security, and identity on the Web — and these concerns are only increasing.
  3. So, Do Not Track, the Privacy Bill of Rights, and similar guidelines will gain widespread approval and adoption . . .
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CI FAIL: The Valentine's Day Edition

Despite being something of a romantic, I don't really go in much for the so-called "Hallmark Holidays." In fact, this XKCD comic sums up my feelings rather perfectly:

Still, I'm very aware that lots of other people enjoy Valentine's Day, and that it's a holiday that's just begging for CI pros to get more strategic about. Leveraging shared wish lists is one use case I really like, as is intelligent (read: permission-based) householding. Imagine, for example, a travel company that enables a couple to "gift" each other a special dinner or spa treatment during a shared vacation. 

But sometimes, CI goes horribly awry, as I recently experienced with Proflowers.com. I offer Exhibit A:

This email was sent to my email address, but addressed to my ex-husband. It's not hard to understand how this could happen: householding snafus might sometimes create a false connection between an email address and a first name, for example. In the grand scheme of things, if I was going to put CI Fails on a TSA-scale rating, I'd give this one a very bright yellow.

But embarrassingly (for all involved) it got worse. Just a few days later, another of Proflowers' brands, Shari's Berries, sent me this email:

In case it wasn't obvious? I'm not Kimberly.  

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Categories:

Facebook Or Google: Who Will Win the Customer Engagement Battle?

Plenty’s been written already about Facebook’s IPO filing yesterday. I won’t rehash the many excellent analyses that you’ve surely already seen.

Instead, I want to take this blog post into thought-experiment territory. I want to think about a world in which Google and Facebook are primary competitors in a mano-a-mano battle—not just for our eyeballs, but for our data, too. For the right, as it were, to be our “digital identity.”

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Over the holidays, my mother—67 year old tech-accepter, Kindle-owner, smartphone-avoider—called me into the office to show me her Facebook newsfeed. “How,” she asked, “do they know that I’m interested in Persian classical music and that I live in Los Angeles?” As I was explaining behavioral targeting and computational advertising, I glanced over at the computer, only to see her click through and order tickets from that Facebook ad.

So I asked, “Do you trust Facebook?” To which she replied, “Of course not!” as she entered her credit card number, home address, and email address for a very spendy concert ticket.

“Do you trust Google?” I asked. “More than Facebook, I suppose,” she answered. “But Facebook shows me stuff I like more often than Google does.” 

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That experience, plus a brainstorm with my colleagues on the Customer Intelligence team here at Forrester got me thinking: What if, as a consumer, you had to choose between Facebook and Google? Which service is more valuable to you? Which will BE more valuable in the future? I decided to compare the competitors (and let there be no mistake—Facebook’s S-1 filing very clearly identifies Google as Enemy No. 1) across the dimensions of Forrester’s customer engagement cycle:

 

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Google Data Integration: Could It Drive PIDM Adoption?

Yesterday, Google announced that, effective March 1, it would be creating a single view of users across the majority of its products and services and creating a single, simplified, global privacy policy to cover the new approach.

Now, as a customer intelligence analyst, I preach a “consolidated view of the customer” to clients nearly every day. I advise retailers, CPGs, and others that creating an optimal experience for customers is nearly impossible without having a clear understanding of their needs and preferences, across all channels and lines of business. But what Google’s doing extends well past traditional “single view” and into “personal data locker” territory.

On the face of it, Google claims that it’s making these changes for the same reason: to improve the user experience. But to remain profitable and keep providing free services to several hundred million users, Google will also use its vastly increased insight about users to sell better targeted (read: more expensive) ads to advertisers. 

Is Google’s new policy PIDM-friendly?

I wanted to look at how these changes map to the principles that companies must follow to be successful as personal identity management emerges. Here’s my take:

  • Privacy: Google’s new privacy policy is a good one. It’s simply written, well constructed, and fairly concise. It’s almost global, excluding only a handful (Chrome, Wallet, Books, DoubleClick) of its businesses. However, while the policy allows broad-brush opt-outs, its failure to provide its granular controls over what’s shared between properties and devices is a major miss.
     
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How Data Sensitive Are Your Customers?

Most marketers and customer intelligence (CI) pros tend to lump together most types of customer data. Sure, things like passwords and social security numbers are considered more "sensitive," but for the most part, the systems that protect all the data -- and the privacy policies that communicate their capture and governance -- are largely the same.

This model used to work just fine. But in an era where consumers are becoming increasingly aware of data capture, data breaches, and the value of personal data, it's not enough to treat all data (nor all customers) the same. In researching our latest report, "Personal Identity Management Success Starts With Customer Understanding," we found that:

  • Individuals see different types of data differently -- they're most worried about what we consider individual identity data, and far less concerned about the capture and use of their behavioral data
  • Most consumers are willing to share their data in exchange for value. But, what they consider "valuable" is very age-dependent -- in other words, the same consumer isn't equally motivated by discounts and cash rewards. 
  • A surprising number of consumers "just say no" if a privacy policy doesn't pass their sniff test, and the numbers seem to be rising. 
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