Unlocking the potential of personal dataA guide to driving consumer engagement in the personal information economy

Report 2016

#riseofMe2B

The rise of the Me2B economy 3

Key research findings: a consumer 4

perspective

Fast-forwarding the value exchange 6

The three consumer data personas 10

Three ways to improve consumer 14

trust and drive the personal information economy forward

The cost of inaction: 16

from lockdown to liberty

A sound direction for the future 17

About Callcredit Information Group 18

Content

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It’s a phenomenon that’s hard to ignore. The digital revolution has led to an unprecedented explosion of personal data that continues to erupt at an astounding rate.

Take our use of the smartphone as one example. Collectively, more than three quarters of the UK consumer population interact with a smartphone device over a billion times a day. From satisfying our insatiable appetite for video on YouTube to getting our multimedia messaging fix from the likes of Giphy or Facebook messenger – digital is becoming increasingly entrenched in our daily lives.

Every day, we create 2.5 quintillion bytes of data — so much that 90% of the data in the world today has been created in the last two years alone1. As wearables, the Internet of Things and virtual reality begin to make their way into the mainstream, the quantity of personal data is set to accelerate at an unprecedented speed.

It’s a revolution that has triggered an opportunity for brands to get to know their customers better than ever before. Every click is a reflection of their identity, behaviours, passions and thought processes. In return, those customers benefit from

a higher quality of products and services, tailored to their individual needs. Yet a Callcredit Information Group survey of 3,000 UK-based consumers has highlighted that more must be done to ensure that people feel they have full control over their own data and a deeper understanding about how brands are using it. This, combined with tackling consumer concerns about the risk of identity theft and online fraud, will accelerate growth of the personal information economy to the mutual benefit of both businesses and consumers.

This report will draw on Callcredit’s research findings to gain a deeper understanding of the consumer psyche in relation to personal data and provide action points detailing how businesses and organisations can be better positioned to respond.

1 IBM https://www-01.ibm.com/software/data/bigdata/what-is-big-data.html

The rise of the Me2B economy

People attach a financial value to their dataAlthough we can deduce from the survey findings that greater levels of understanding must be built to ensure people understand why, how and exactly what their personal data is being used for, awareness that there is some sort of financial value attached to it is already high.

Nearly two-thirds of consumers understand that personal information is important in enabling an organisation to offer a personalised service.

Key research findings: a consumer’s perspective

attach a financial value to their personal data.

73%

The personal information economy remains an abstract concept to the average consumer

The majority of consumers are not consciously aware of the personal information economy or that they even have a digital identity.

One in six people don’t currently see a single benefit in sharing their personal information.

Only 38% are familiar with the phrase ‘digital identity’.

With 50% of people doubting that their online searches contribute to their digital identity.

4 Unlocking the potential of personal data Report 2016

46% feel there could be more information about how privacy is protected and, ultimately, kept safe and secure.

of consumers want brands to be more transparent about how data is being used and communicate how the exchange will benefit them. Cementing trust in this way will help get the majority behind the opportunity and result in real benefits in the relationship between brands and consumers.

A perception of lack of control is hindering the growth of the Me2B economyConsumers don’t feel in full control of their data and are concerned about the perceived risks of identity theft and online fraud that come with sharing it.

A minority contingent is embracing data exchange as the path to nirvanaRefreshingly, there is a distinct group emerging that is keen to drive the personal information economy and embrace the opportunities that the exchange of data presents. This group believes the value to themselves in sharing personal information will out-weigh the perceived risks.

Consumers offer their take on how to gain widespread engagementThere is a sense that consumers want to make the data exchange work.

60%

85% believe personal information is important in enabling organisations to offer a personalised service.

While 63% see sharing personal data as an opportunity to have a more personalised experience rather than as a risk to the security of their personal identity.

Within this group

More than three quarters of the group are either happy or neutral about organisations accessing data to improve the advice and services they provide.

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“Personal data can be viewed as an economic asset generated by the identities and behaviours of individuals which is traded in exchange for higher quality services and products.”The London School of Economics and Political Science

Cassandra Liem Georgios Petropoulos2016

If businesses can become more in tune with what consumers both want and expect from the data relationship, there is no doubt that they will improve customer experience, increase loyalty, service interaction and ultimately sales.

In turn, once we let it, the data we share as consumers can be used to make our lives easier, more efficient, economical and enjoyable in ways that are perhaps unimaginable for many people today.

It’s not until we start putting two and two together about how the data we share is enriching our lives that we realise this can become a win-win situation. In fact, we’re already driving better outcomes for ourselves.

Take Citymapper, a popular consumer app that uses the power of mobile and open transport data to help people survive their daily commutes. The iOS, Android and web application aims to make it as easy as possible for users to navigate around London, displaying useful information, such as how much each transport method costs, the weather at a chosen destination and how many calories one would burn if they walked or cycled.

Customer loyalty cards are another powerful example of how the value exchange can work in practice. The MyWaitrose card, for instance, delivers real time rewards to customers, such as a free coffee and a newspaper, not to mention the warm glow of immediate recognition of loyalty.

Fast-forwarding the value exchange

47%

39%36%

28% 26%

13%18%

Saves time (i.e. easier to have the same conversation across multiple channels, such as on the phone, online, in-store)

Receive personalised offers/ promotions (i.e. based on my own personal preferences)

Key information is saved making purchase more easy/don’t have to repeat myself

Receive timely offers/ promotions (i.e. based on my GPS location)

New products /services are suggested which might be of interest to me

Makes me feel unique/ different as a customer

None of the above

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Tesco’s Clubcard is another example. Established in 1995, it is now used by 16.5 million customers. In exchange for the data consumers provide to join the scheme, it offers them one point for every £1 spent in store. Customers can use these points either to get money off their next Tesco shop or in restaurants, pubs or attractions. Tesco Clubcard also sends customers personalised vouchers for money off products they regularly buy.

With consumers sharing personal information, businesses can offer the right products, at the right price, through the right channel at

the right time. The evolution of tech is enriching this value exchange. Yet, before we can find a way to address the technological and psychological barriers that consumers are putting up, this exchange remains somewhat abstract and we must look to consumer attitudes to guide the way forward.

The Callcredit research highlights that there is recognition of the benefits that come from sharing personal information particularly with regard to saving time and money and increased personalisation (see chart).

The benefits of the personal information economy

8 Unlocking the potential of personal data Report 2016

A generational divide Overall, people view sharing personal data as more of a risk than as an opportunity for a more personalised experience. However, we see a significant shift in opinion among the younger generation. A far greater proportion of under 34 year olds view the benefits of sharing personal information as far outweighing the risks.

31%

37%

69%

63%

Opportunity for a personalised experience.

Opportunity for a personalised experience.

Risk for security of personal identity.

Risk for security of personal identity.

Overall consumer

group

Next generation

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The three consumer data personas

Businesses that want to unleash the potential of the personal information economy will have to do more to convince consumers of the benefit of sharing their data. Organisations will not only have to overcome consumer reticence and build trust, they will have to address the specific concerns that different consumers have around sharing personal information.

A ‘one size fits all’ approach is not sufficient. Instead, businesses must think of their audience in terms of three distinct persona categories, each with their own attitudes towards, and expectations of, data sharing.

Our research defined these three audience segments as follows:

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Reserved Rachel22% of total respondents fell within the ‘Reserved Rachel’ category. The majority are 45 - 64 years old and are the least likely group to live in London. They are significantly more likely to feel intruded upon when asked for personal information by public bodies or businesses. Reserved Rachel currently sees few benefits in sharing personal information and is more likely to cite risk of identity theft and risk of data being lost as a key concern.

Could be Swayed SarahThe ‘Could be Swayed Sarah’ group made up a majority of the audience at 56%. As with the ‘Reserved Rachels’, they are also more likely to view the sharing of personal data as a risk (75%) rather than an opportunity (25%) but would be significantly more willing to share information if the EU’s GDPR legislation was already in place. Just 11% of this group are less than 25 years of age.

Game-changer Gavin There is a keen contingent of younger consumers driving the personal information economy, the ‘Game-changer Gavins’. Almost half (47%) of this group are under 34 years of age. Happy to share their data, they embrace the opportunity that this exchange presents to them on a personal level. More about this group is detailed on page 12:

45 - 64 years old

45 - 64 years old

25 - 44 years old

11% are >25 years old

47% are >34 years old

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56%

22%22%

Reserved Rachel

Game-changer Gavin

Could be Swayed Sarah

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So, generally, brands are dealing with one group who will be hard to win over, another that currently display signs of reticence but could potentially be swayed, and a third group that is actively engaged and ready to take advantage of the benefits.

Yet the million dollar question remains, “How do we galvanise the rest of the nation and future generations into adopting a similar mind-set to our ‘Game-changer Gavin group?” The next section of this paper will put forward Callcredit’s take on the solution.

Game-changer Gavin

85% believe personal information is important in enabling organisations to offer a personalised service.

58% happy and 24% neutralabout organisations accessing past spending data to improve the advice they give their customers.

63% see sharing personal data provides an opportunity for personalised experience rather than a risk for the security of personal identity.

83% recognise that their digital identity has a value to brands.

22% live in London.

Three ways to improve consumer trust and drive the personal information economy forward

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As referenced earlier, our research is an excellent reminder that privacy, transparency and relevance are key to achieving consumer trust, which means offering accurate, detailed information about how customer information is being captured, stored, used and shared.

Get this right, and the new information-rich digital economy will be a game-changer. However, the consumer needs to be the driving force. So what can businesses do to get them on side and win their trust?

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1. Use data creativelyOur research tells us that high-profile, but limited, cyber-attacks will not deter the engaged consumer (Game-changer Gavin) from sharing their data with brands, but they do expect more rewards and a better experience in return. Customer loyalty schemes, which have been a key target for cyber criminals over the years, are a good example where brands haven’t given up on building customer loyalty. On the contrary, rather than assume consumers will be turned off by the risks, we’ve seen many brands evolve their offer to make it more valuable to customers and go that extra mile to keep them engaged.

The golden rules

2. Communicate what you are going to do with your customers’ data and, most importantly, how this will benefit them

If you don’t have transparency, people aren’t going to understand. That’s when the confidence goes. So if a business is giving consumers free access to a calorie counting app, for example, let them know upfront what will happen to the details they enter about their daily food intake and highlight that as a result of this exchange, they will automatically be warned of unhealthy dietary habits which will in turn help them to lose weight.

3. Always ensure it’s a fair exchange When the giving up of data gets reduced to something transactional, it becomes an impersonal experience for the consumer and leaves them feeling short changed. Investing time and effort into engaging with your loyal customers in smart, bespoke and powerful ways will pay off. When you really hit the spot, a consumer might feel compelled to share a one-to-one gesture on social media whether with friends on Facebook or followers on Twitter. It’s about building genuine connections through data and the time invested upfront to do this will pay off.

ITV went a step further and launched a proactive campaign called ‘Why Your Data Matters’ with a video demonstrating its transparent attitude to data, explaining in a relaxed and open way exactly what that information can do for the reader.

The cost of inaction:from lockdown to liberty

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“Those who deny freedom to others deserve it not for themselves.” Abraham Lincoln

Now, as we find ourselves immersed in the digital economy, our need to reaffirm our liberty is again resurfacing – our ‘digital liberty’.

As security issues remain, and awareness that our data has significant value to others increases, is this causing us to become more protective over what we share and lock-down the data that we once gave brands access to more freely?

Over 200 million digital consumers now block digital advertising, for example and the use of other privacy tools such as Tor and VPN are also on the rise. Most people are aware that digital surveillance, commercial or otherwise, is on the rise, and this is emphasised by reports in the news about identity theft, cyber-bullying, sexting and Facebook listening apps. Such a ‘lockdown’ would have dire consequences for brands but with the right approach, it isn’t too late to restore trust and get consumers engaged in, and benefiting from, the data exchange.

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We must deduce, after taking a deeper look into what is driving consumer inertia that now is the right time for brands to adopt a fresh vision of personal data empowerment and win back the trust of consumers.

The management of data will see a paradigm shift as people take control of and monetise their own data. As consumers create more personal data and use it as a personal asset with businesses and other consumers, they will need a centralised and trusted point to help them manage their digital identity. This will include managing consent across their own personal data, controlling who sees what, when and their contact preferences dependent on sector and activity. If the identity of consumers cannot be validated and verified online, it impacts the bottom line.

We need to get to a place where consumers trust that the value of data is shared evenly amongst them and the organisations that use it. Yet we must do this in a way that creates a balance between protecting consumers’ privacy and digital identity with the ability to innovate and enhance people’s lives.

The answers are not straightforward but what businesses, government and consumers all agree on is that the digital economy is most efficient when systems are open, distributed and transparent. We’re moving from mass production and mass communication, from B2C to a true Me2B economy, the future is undeniably exciting, for both consumers and brands, and full of opportunity ready to be unlocked.

Research methodologyUnlocking the potential of personal data is research project commissioned by Callcredit Information Group, working with London-based research agency, Loudhouse. 3,000 UK consumers completed an online survey about sharing personal information in July 2016.

A sound direction for the future

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Founded in 2000, Callcredit enables consumers to manage their digital identity in the personal information economy. If the identity of consumers cannot be validated and verified online, it impacts the bottom line.

At Callcredit, our approach to the personal information economy and managing digital identity, means we can enable businesses to bridge traditional, offline identities with highly transient, online identities. By providing a single access point in real time, we can provide peace of mind by validating and verifying digital identity.

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Contact

For more information about the findings of this report or to speak with a Callcredit spokesperson, please contact

Mark Davison, Chief Data Officer 0113 388 4300 Mark.davison@callcreditgroup.com

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