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The Fine Line Between Data Analytics and Security
Posted on May 20th 2014
The more you know about your customers, the better you can serve and give them the products they want. In return, the more they trust and become loyal to your brand. But with all the information you gather from your customers to provide one-to-one service and personalized products comes the responsibility to take care of their personal data. One slip-up and you could lose their trust.
I’ve had a lot of time to ponder this since SXSW 2014 where we uncovered which social business themes are top of mind for marketers. With the help of Mass Relevance, with whom we created the IBM-sponsored engagement platform, we followed thought bubbles on analytics, collaboration, customer connection, innovation, and security. As everyone networked and interacted on the platform, analytics got the most traction. Is it surprising that security got the least? This tells me we’re ready to realize the benefits of data, but data security remains a crucial concern we don’t want to face.
It’s no surprise that 61 percent of 2,500 global marketers are boosting their data and analytics budgets this year, according to the 2014 State of Marketing report. Driving it home even more is Gartner's “Digital Marketing Spending” report, which found digital marketing budgets would increase by 10 percent in 2014.
But while marketers are gearing up for data, security continues to catch us off guard. Snowden-related buzz dominated at SXSW. And data breaches (i.e., Target, Adobe, Korea Credit Bureau, Neiman Marcus) are all over the news. So why did security receive the least attention at SXSW on the digital experience?
I may be going out on a limb here, but I suspect that the expertise needed to implement effective data protection and maintain compliance cost-effectively is just not obtainable yet for most organizations. Take Target, for example. Criminals were able to hack into its database due to lack of security, which was a result of under-investment, according to Cowen (a financial services firm).
To continue the conversation from the studies, SXSW, and what’s going on in the world, we touched base with two experts on our SXSW breakfast panel, Social Business Shake-Up. Sandy Carter of IBM and Natanya Anderson of Whole Foods are authorities on the front lines of social. Here they share their experiences: one from IBM’s customer, Macy’s, and the other from Natanya’s company, on business analytics and data security.
Data Analytics Lessons
Macy’s and Whole Foods rank among the top of the world’s brand loyalty leaders for connecting emotionally with their customers, and consistently surpassing consumer expectations, according to a recent survey by Brand Keys, a brand loyalty research firm.
“Macy’s wanted its online store to offer a more personalized shopping experience so they established a more engaging and data-driven website,” Carter says about its case study on the retail store. “With IBM Big Data & Analytics, we combined their customer preferences with recent purchase histories to create personalized recommendations, and promotions. The result, called ‘My Macy’s,’ is a sweeping initiative designed to embed a customer-centric philosophy into every aspect of the company’s operations.”
With all this personalization, you’re probably wondering about Macy’s privacy and security procedures. The store shares a Notice of Privacy Practices on its website, disclosing everything from what they collect and how they use it to how to access the information you share with them. Under “Information Sharing,” “Externally,” shoppers can opt out of the IBM Digital Analytics. Macy’s also shares a “Secure Shopping” page on its website, guiding shoppers on how to tell if transactions are secure and offering a guarantee against credit card fraud. These links are at the bottom of each page where you fill in personal information. I suspect that down the road these pages will pop up automatically for review before shoppers can enter any private details.
It seems like a lot of trouble for one-on-one service and a personalized shopping experience. But there are so many other benefits to using social data to glean customer insights that it is worth it. It helps us understand what they value, not just what they are buying. We can predict what new products and services will attract customers. When a customer buys one product or service, we can predict what they’ll need next. Data helps us revise processes to save customers time, money, and prevent their pain points. It facilitates relevant, timely, and personalized messages. We can also prepare for potential threats from competitors, and identify business and marketing trends. But sifting through big data for any and all of these insights is not easy.
Whole Foods’ approach, which Anderson outlined at SXSW, is to turn “big data into small data.” The marketing and IT teams segment data into smaller sections based on certain data points. “We are still very focused on how to start with small subsets of big data to drive actions that make a difference to the business here and now,” Anderson says. “Optimization is key right now. We are trying to improve communications with customers, our overall approach to our work, and the relevance we are creating for the customer and the business.”
Of course, as a brand grows and becomes better known, the threats and advantages of using social grow as well. “There are two key components to managing the health and wellbeing of the brand's reputation as we grow: one is operational, the other cultural,” Anderson says.
“From an operations perspective, we have to scale our approach to training and best practices support to account for the growing number of people communicating in social on behalf of the brand,” Anderson explains. “On the cultural side, Whole Foods is working hard to tell similar stories so we don’t create a fractured customer experience.”
Whole Foods ensures their customers’ information is protected by using a “measure twice, cut once philosophy” for every decision and act regarding customer data. “Before we think about how to store any piece of data, we require that we have a very real and measurable business case for why we are collecting it in the first place,” says Anderson.
The grocery store whose brand has focused on local and healthy supplies has also established stronger guidelines on passwords, dual-factor authentication, and overall access to password information.
The Future of Data and Security
“We, the everyday consumers, must make privacy and security profitable,” a blog post on the ACLU website intriguingly suggests. That means if we want tech companies to put our data security first, we’ll have to pay for the platforms we’re used to getting for free. We will have to insist on and pay for built-in privacy. Clearly, as we learned from SXSW, this is not yet a “sexy” concern but is bubbling hard beneath the surface.
In the future, we are increasingly going to have to either accept greater regulation (which very few of us seem to want, based on the reaction to other forms of net interference) or demand that the products we buy and the websites we visit comply with the highest level of encryption technologies and visible controls. In the same way that many of us will pay more for an organic chicken from Whole Foods, we’ll start to accept higher prices for services and products when we know that we will not be running a risk to our privacy when we give up our personal data.
image: Data analytics/shutterstock.