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How to Protect Customer Data While Fostering Customer Intimacy

In this era of digital disruption, customer experience rules. The President of Hyatt Hotels Corporation, for example, claims, “Customers today buy experiences not products.” For him, the physical room is no longer enough to win against ‘new age’ market disruptors like Airbnb. To differentiate themselves, Hyatt is amassing customer information and using predictive analytics for insights to fundamentally change the guest experience.

Those that use customer engagement as a business strategy are consolidating customer data in Hadoop or other big data repositories in order to create competitive advantage. By doing this, these consumer-facing organizations can turn data from a static asset into a foundational business capability. Doing this well means, in the words of Jeanne Ross at MIT/CISR, “every day, you wake up trying to figure out what you can do next to make customers love you."

Two case studies for driving customer experience

Take a look at what Hyatt and Nordstrom have done. In Hyatt’s case, they are using customer data to discover patterns that will enable their hotels to truly excel at customer service. They are using the data they have on flight connections as well as the buying patterns of their top guests to deliver new forms of customer service. With this, if a top guest missed a flight connection or been significantly bumped during their travel day, they can use the guest’s purchase history to notice, for example, that he or she bought Apple Martinis the last three stays at a Hyatt property. So when that guest arrives, deliver an Apple Martini as he or she arrives at the room.

Meanwhile, Nordstrom recognizes that, “The customer is in the driver's seat. If you embrace that, you will thrive.” The retailer is creating what it calls a personalized shopping experience, joining a transparent shopping experience and transparent supply chain. This combination allows Nordstrom to predict what a customer needs that is in stock and to know how to get it to them regardless of customer channel.

Are you protecting your customers?

It should come as no surprise that well over 50% of big data projects are in one way or another focused upon sales and marketing. But business risk is created with a derived total view of customer. Typically, these include personally identifiable information (PII), social media data, purchase history and the list goes on. This derived data is at risk even when the big data instance is a backroom experiment.

One Chief Privacy Officer said to me recently, “CMOs interested in creating deeper relationships with customers or in driving customer experience should make protecting data a part of their initial big data charter.” He continued by asking, “How can you put together the data to drive customer intimacy and not protect against the risk of losing the intimacy?”

Clearly, there is a race to drive customer intimacy, so protecting data should not impact those trying to use it. Data needs to be easy to use in order to effectively discover relationships and apply predictive analytics to drive offers to existing and potential customers.

Data scientists, in particular, want to access to raw data without people or process getting in the way in order to reduce the time to new insights. Therefore, the big challenge is providing necessary access to information while maintaining appropriate privacy and confidentiality. Put another way, this needs to be about accelerating the time to value for data, so the mantra needs to be, protect and enable.

How to make customer data secure

What is needed to do this well? CIOs say that security today needs to be systematic, with the ability to centrally govern data access and enforce protection policies across every location that data flows – at rest, in use or in motion. This is essential regardless of the nature of data (structured, semi-structured or unstructured) and irrespective of how it is stored (traditional database, a big data file system or cloud-based BI systems like Amazon RedShift).

Parting remarks

Customer data needs to be protected from the start to avoid unnecessary risk to customer intimacy (the latter being marketing’s goal). As such, data security needs to be viewed holistically and as a business and IT priority. Otherwise, organizations could find themselves hostages of public scrutiny and income and business loss as a result of their attempts to enhance the customer experience.

As one CIO put it recently, “A company's reputation is built over years but can be destroyed in minutes. Information security is business critical in digital times.”

Learn more about protecting your marketing data

Further reading

Article written by Myles Suer
Image credit by Getty Images, Blend Images, Donald Iain Smith
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