Why would bringing data to our customers bring us an advantage?
We did so much effort gathering all our customer data, and now you’ll throw it up for grabs to our competitors?
Often, those are the first reflexes when you are a company that has collected customer data.
Sooner or later, your customers will start to ask for their data. But that may be too much of a negative incentive.
However, the risk of being 'kodaked' (Kodak was a market leader until digital disruption eclipsed film photography with digital photos) will increase over time.
An interdependency problem
Having access to all this customer data you don’t have access to yet, may be a bigger incentive… If you are willing to step into this positive sum game.
Below, you find an example of the prisoner's dilemma game applied to data sharing.
An important fact is that the value of data doesn’t simply add up as it is brought together. The whole is bigger than the sum of the parts, as connections multiply, and possible paths have a factorial growth!
If you share data, and don’t get data in return, your competitor has a small gain, and you gain nothing. But if you both share data, your mutual gain is huge. But due to the nature of this social dilemma, you might be reluctant to start first.
Konsolidate brings different players in a sector together, to increase the trust among the players, and looks how co-investing and trust provides the basis to step into this paradigm
Still, this may not be enough to convince you.
As a company that does have data, do you really want to continue to spend money in obtaining all that data yourself? Do you want to keep paying the bigger fish who have all these insights and data -you would never be able to attain alone- for their services that are equally costly? The longer you stay in the negative sum game, the more the comparative loss increases.
A shift from competing on data towards competing on analytics.
Data is seen as the new oil. But data is only crude oil. In order to make it useful, you need to refine it, and make products out of it. In a same way as oil gets transformed in kerosene, gasoline, fertilisers, plastics or cosmetics.
The big difference is that you can use and re-use and re-use the same data over and over again to extract new or more refined insights. With the rise of business- and artificial intelligence, it seems obvious that there is a lot to gain.
As a company, why waste time and money to invest in more data? You could invest in data engineers and data-scientists (or products and services they make and provide) to really innovate and digitize your business.
No more vendor lock-ins.
With the rise of PAAS (platforms as a service), we see that many current IT solutions for your CRM, HR, or sales applications keep the data locked away from you.
This might take away quite some worries, but it also means that you’ll be their customer for years to come, and when a better solution arrives, you might be reluctant to make the switch as the costs of moving to this new solution is just too high.
As a small company, who doesn’t have the budget or business focus to pay for all the costs related to data security and managing your databases, you do have the opportunity to outsource this. You don’t need to start collecting customer data… you can just ask data access when it is needed. Or get the insights from a third party that does all the data-handling for you.
You don’t need to overhaul all your existing IT and data infrastructure to get started. We can start with a simple use case that can be beneficial to your company. Even an internal use case (there are plenty of HR use cases, or for your car fleet), or something that is not your core business, thus less disruptive for your company.