Published on the 15/10/2015 | Written by Newsdesk
Many organisations do not manage customer data as a corporate asset, and the monetary value of that data is often ignored, according to Gartner, Inc…
“Digital business is having a significant impact on customer data,” said Douglas Laney, Gartner VP and distinguished analyst. “The growing wealth of information — from social media, location and context-sensitive data collected from mobile devices and the Internet of Things— is increasing the volume, velocity and variety of that information, radically expanding the scope of the 360-degree customer profile.”
Although some organisations have begun to invest in big data technologies in relation to their customers, with a view to direct or indirect monetisation, many lack business models to monetise their customer data.
Gartner recommends that organisations apply infonomics principles by managing customer data with the same discipline as they would any other corporate asset. “Organisations should use valuations of their customer data as the basis for prioritising investments in technologies that help them acquire, maintain, enrich, archive and apply information. They should also calculate thorough business cases when designing monetisation products,” said Laney.
By doing so, they will be able to create the necessary transparency for their stakeholders regarding the profitability of monetisation initiatives. It will also enable them to present proof of the valuation of their information assets during any merger or acquisition, or in an initial public offering scenario, Laney said.
Organisations should also learn how to monetise their customer data from industry examples and various business models currently in use.
For example, banks and credit card companies provide payment information value-added services (PIVAS) to retailers and merchant partners. Banks use PIVAS to understand customers better and to help them build stronger relationships with retailer and merchant communities. Large retailers put their point-of-sale and other store promotion data online for their business partners to subscribe to. Some offer such data free to their suppliers; others monetise it by charging an access fee.
There are, of course, obstacles, notably complex data privacy legislation and the public’s concerns. Gartner said organisations must evaluate the associated risks in relation to data ownership and data privacy when developing business models. Products should then be designed on the basis of the organisation’s level of risk tolerance.
