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VPI: Are you ready to handle the elephant in your room?

23rd Feb 2011
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We are now witnessing the third big wave in customer data - that of volunteered information, explains Alan Mitchell. And the challenge for businesses and marketers is to establish a comprehensive strategic approach to eliciting and deploying volunteered personal information to maximum effect.

Look at all the big online phenomena today. They have one thing in common. Google, Facebook, Twitter, YouTube, etc. are all driven in one way or another by ‘bottom up’ volunteered information.
Take a slightly broader sweep. Individuals volunteer information when they:
  • Input a Google search term
  • Upload a profile onto a social networking site
  • Take part in online chat, forums etc
  • Tick an online box
  • Fill in an online survey, or customer satisfaction questionnaire
  • Phone up a call centre
  • Make a complaint or suggestion
  • Sign up to a loyalty card (where they give permission for attributable information to be collected)
In fact, what we’re witnessing is the beginnings of the third big wave in customer data. The first wave was sample-based market research: statistical, anonymous. The second wave was transaction and behavioural data, detailed and granular and data where the individual is often recognised.
Volunteered information is the third wave. Nowadays consumers aren’t just ‘audiences’ or ‘targets’ for messages. They talk back. They have voice as well as choice. VPI – volunteered personal information – brings with it three crucial characteristics.
Rapid evolution
First, it’s driven by different processes – the things organisations need to do to elicit information from individuals are not the same as they things they need to do to harvest or collect data about these customers. Second, it confers a new, and critical, degree of control on individuals who now has a say over what information they want to share with who.
Third, content-wise, it reaches the parts other waves of data simply can’t reach. Once we consider the information individuals could volunteer if they wanted to its scope and potential is simply staggering. It ranges from their basic administrative details (which are currently a nightmare to keep up to date and accurate) to the broader context within which individuals make their purchasing decisions and the reasons why they make these decisions. It encompasses their future plans and intentions and their product, brand and communication preferences – information which could transform how most marketing communications and initiatives are planned and executed.
And it’s evolving fast. While much of the information that’s volunteered today is ad hoc, unstructured and indirect (i.e. via social networking platforms), this won’t always be the case. The technology already exists to make volunteered information a highly focused, organised, structured and often automated information exchange – one that could massively cut organisations’ customer management costs, drive new levels of relevance and value while setting a real-time insight-generation engine in motion (see Mydex’s plans for mass-scale, structured VPI for example).
VPI strategy
The challenge for organisations now is develop a ‘VPI strategy’ – a comprehensive strategic approach to eliciting and deploying volunteered personal information to maximum effect. What information could we elicit from our customers? How? Using what mechanisms and what context? Via direct information exchanges between us and them, or via third party platforms? What’s in it for the customer? Why should they bother? And what’s in it for us? What could we do with this information once we got it?
Of necessity, these questions cover many bases, from the technicalities of data collection and management through to key relationship issues surrounding trust and value.
Currently, however, most organisations are suffering from the blind men/elephant syndrome. Different parts of the organisation are touching different parts of VPI – social media strategy here, online engagement there, market research, call centre and customer service and so on. But none of them are seeing the enormous elephant in the room: these are all just different manifestations of the same beast and we need a common, comprehensive across-the-board means of dealing with it.
So what can marketers and CRM practitioners do? First simple step is to conduct a rigorous VPI audit. What information are customers currently volunteering, when, how and why? How good is the organisation at eliciting and handling this information? How open and relationship-enhancing is its current ‘information contract’ it has with its customers? How could volunteered customer information be used better? What are the current obstacles to further, richer information sharing? How can they be removed?
Longer term, all customer-facing organisations will need to accept the fact that the elephant is already in their room – and their future success depends on their ability to ride it.
Alan Mitchell is a founder of Ctrl-Shift and Mydex, the personal data store company. Ctrl-Shift has developed a free online ‘VPI Readiness Test’ to help organisations calibrate their internal capabilities as they relate to VPI (‘can we handle this information well?’ and their ability to elicit this infromatiion, including the ‘information contract’ with the customer (‘have we got the policies and practices needed to deliver the trust and value that’s needed if customers are to volunteer information?).

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