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Data exploitation

Will customer data exploitation be the death of CX?

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Many companies collect customer data to help them to improve experiences. However, some also then sell this data on to create another revenue stream. With customers becoming more conscious of how their data is being used, could the nefarious activity of a few brands cause irreparable damage to the CX strategies of the rest? 

13th Jun 2022
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It’s no secret that a majority of companies collect user data for the purpose of consumer surveillance. Every time we use a Google, Facebook or any number of online services, the chances are that our data is being harvested, observed, and potentially used in ways we are unaware we have agreed to.

There are a number of different ways that our data can be collected and deployed. A recent McKinsey report found that over half of consumers feel worried about what companies are doing with their data, yet very few take adequate precautions to protect their personal information.

Mostly, consumer data is said to be used for direct marketing. We are being "spied on" so that third parties, advertisers and search engines can tailor their suggestions, predict our future or present needs, and cross-examine our interests.

Data is also increasingly being used to drive a positive customer experience (CX). Customer relationship management (CRM) and business intelligence (BI) tools are key to this effort, and can enable marketing experts and developers to observe how customers are interacting with their website, tools or applications, so that they can make the appropriate changes to enable a better, more user-friendly customer experience.

This, in turn, will help companies generate more sales, improve customer service and increase productivity. Using data in this capacity can actually be a welcomed addition for consumers who benefit from the perks of personalised feeds, tailored suggestions, and loyalty rewards.

However, data is the new oil, and companies get greedy. Can we really trust why our data is being collected, who is using it, and how it is being deployed? 

For example, most casual users of services like Facebook, Google, PayPal and Experian, will not be aware that their personal data is being harvested and sold to interested third parties, including partner companies, advertisers, marketers and even credit card companies. 

Social networks, search engines and many other online services also deploy, or indirectly comply with, a data exploitation tactic we have termed adjunct surveillance. This is the practice of monitoring data and activity through another business tool, or through third parties, cookies, and trackers embedded in the software. To put it another way, adjunct surveillance is where devices, software, and even smart applications and IoT hardware, speak to each other, sharing data relating to location, interests and activities to surveillance companies that aggregate the information and sell it as a service to whoever wants to show you ads.

This practice isn't restricted to technology, either. For instance, there's no guarantee that your telecom provider isn't selling your data to surveillance companies. Not so long ago, Google made a deal with an American healthcare company to gain access to patient medical records.

The incentive for this is largely due to revenue and monetary gains. For many companies, just selling their services as advertised, are no longer enough, especially when they can very easily open another revenue stream by collating data, typically under the guise of CX or for direct marketing, and selling it. This improves turnover and keeps investors happy. With society becoming increasingly digitalised and ‘traceable’ we can only expect this activity to continue, before it is forcibly stamped out.

This could, hopefully, be sooner than we expect, due to the rise of data conscious consumers. It’s been over six years since GDPR was introduced, and consumers have grown increasingly privy to how their data is being used, and are demanding more control and transparency over companies’ personal data usage policies.

Eventually, more businesses will find that the insights acquired, or monetary benefits gained from exploiting consumer data, are not worth the risk of a damaged reputation.

The advice from Zoho is that businesses should distance themselves from any third party trackers associated with their online services, and maintain a completely transparent data usage policy with their customers. For businesses looking to go further, disassociation with any form of data analysis, harvesting or usage could be a worthy long-term strategy, creating a brand image that values customer trust over short-term financial gain. This might mean removing third party trackers, which causes some disadvantages, such as not being able to monitor the success of online campaigns as effectively, but the customer experience advantages could well be worth it. It’s certainly worked so far for Zoho, which removed all third party cookies from its websites and then developed its own solution in-house to track online marketing performance.  

But won’t CX suffer without data exploitation?

While data does play a key role in many modern businesses' CX strategies, exploitation does not have to. Plenty of data from customers can be gathered and used transparently in a positive way to drive a more personalised customer experience. 

Collaborative customer feedback and review systems can play just as vital a role in informing strategy, averting risk and improving services. This has the added benefit of establishing honest and open lines of communication with customers, and understanding their active opinions about a given service, as opposed to assuming it based on indirect information gathered dishonestly or under the radar of customer agreements.

Another innovative way that organisations are bolstering their customer experience is by investing in AI-powered automation. Not only can automation software, via purpose-built CX tools, ensure quick access to vital customer data, but it also significantly reduces time spent on backroom tasks, freeing them up to focus on prospects which require human input and intervention.

Similarly, organisations need to look at how their teams are dealing with customer engagement. Are customer-facing teams communicating with each other on a regular basis? Do they have access to the same information or customer context at their finger tips? Are in-house developers working towards separate goals, and at risk of not stopping to think about customer experience? 

These are all changes, among many, that organisations can prioritise to bolster the customer experience even more effectively than data-enabled insights. In today's increasingly competitive markets, brands which operate in the right way towards their customers will be the ones that drive affinity and long-term customer relationships leading ultimately to long-term futures. 

 

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