We’ve all heard the references to data being the new oil, an essential fuel powering the digital economy. As industries and ecosystems build up around capitalising on this, businesses are going to need advice about how best to source, manage, value and leverage this precious asset.
This is the premise behind a very useful new white paper from the Luxury Institute, which is committed to developing deep expertise in data to best serve its clients, called The 10 New Rules For The 21st Century Data-Driven Enterprise.
An introduction to the white paper states: “The 10 rules are designed to help ethical business leaders and their teams to develop a 21st century mindset and understand the true nature of personal data. This is critical in an emerging world where consumers are gaining greater and greater control of their data through regulation and market forces. Consumer brands urgently need to master how to gain direct, legal, ethical access to customer data, and optimize its use, combined with emotional intelligence, in order to create deep, lasting customer relationships.”
So what are the ten new rules for the 21st century data-driven enterprise?
Rule 1: Consumers are highly selective about sharing personal data
The “most magical attribute” of personal data, says the Luxury Institute, is that it can be used by “hundreds, even thousands, of brands in dozens of categories, all at the same time, for different purposes.” But trust is key – the Institute also notes that “the most trusted, transparent, legal, ethical, creative and innovative brands will get the loyalty of customers, including their precious data. Many will fail to earn trust and be left out.”
Rule 2: Data accessed directly from the individual is the most accurate and trustworthy
Data directly sourced from, and authenticated by, customers is “the critical resource for every enterprise” simply because it is timely and accurate. Third-party vendors, in contrast, are unable to guarantee the accuracy of their data.
Rule 3: Real-time personal data is most often the most valuable
As people evolve daily, hourly, even minute by minute, personal data expires and becomes less relevant. Brands, therefore, says the Luxury Institute, “need to be able to access the most recent, relevant data/insights, often in real time”. It also cautions that, in many cases, a brand’s ability to access the most up-to-date data and process it with AI in real time will be the difference between commercial success and failure.
Rule 4: Access to multiple personal data streams from one customer creates even more value for the brand
When different data streams from one person are combined, the value of the data to each brand increases dramatically. For example, combining genetic data with medical history, nutritional and exercise data can help healthcare and wellness companies develop new products and services which can be monetised. Crucially, the Institute says, “in order to deliver advanced personalization, brands need access to an optimized combination of a customer’s multiple relevant data streams, generating even more value for customers, and consequently, the enterprise.”
Rule 5: In the age of AI, more personal data generates more accurate predictions
Vast increases in computational power, combined with machine-learning algorithms and real-time processing, mean that the more access to more data a brand has, the greater its predictive power and, in turn, its ability to convert and retain customers.
Rule 6: Personal data access generates breakthrough innovations for brands
With access to customer data and insights, brands can innovate to create valuable new breakthrough products and services for new markets. Says the Institute: “Brands that seek long-term competitive advantage through innovation must build the iron-clad trust that fuels the continuous data access that enables and empowers breakthroughs in new products and services.”
Rule 7: Diverse data access generates legal, ethical, effective solutions
Artificial intelligence is driving brand predictions, recommendations and decisions that affect our daily lives, but there is a strong recognition that algorithms can be biased, racist, and worse. So, says the Luxury Institute, “any brand that accesses data must guarantee that the data is representative of the society and delivers fair treatment and opportunity for all individuals.
It adds: “These are the new moral standards of personal data in the 21st century and brands that fail to do so will unravel in a data-less black hole as ethical consumers abandon them and take their data with them.”
Rule 8: Direct access to consumer attention is the future of advertising
Brands today are wasting massive sums of money targeting digital ads to the wrong people at the wrong time on digital platforms, yet technology exists which allows them to contact and compensate prospects and customers voluntarily. At minimum using direct contact, says the Luxury Institute, “brands will have confidence that their communication was viewed and judged by right person and can learn immediately through the insights that are generated. The attention economy is transforming into the right attention economy. Innovative brands will lead this trend, instead of follow.”
Rule 9: Consumer intention is the ultimate data resource
Customers clearly stating their intent to shop and/or buy are data points and insights that brands in many goods and services categories want to access in real time. This prevents them from wasting resources, and from wasting the time of people who are not real, timely buyers. This is probably one of the most straightforward and lucrative ways that brands will generate data-driven revenue in the 21st century. “Brands need to earn and verify trust, and guarantee privacy and security first, but consumers will soon directly help transform the inefficient and ineffective attention economy into the mutually profitable intention economy”, says the Institute.
Rule 10: Personal data security, privacy and advanced personalization are completely compatible
Key to all of the above is that technology is evolving so rapidly that the capability already exists for customers to create a store of their own personal data, for use by both themselves and brands. Gartner predicts that as early as 2022, 75 per cent of enterprise data will be created and processed outside the traditional cloud versus just 10 per cent today. Frost & Sullivan, meanwhile, predicts that 90 per cent of industrial enterprises will be using edge computing by 2022.
This means, says the Luxury Institute, that “the consumer device, not the cloud, will be the center of advanced personalization. Leading brands need to join this movement now or be left behind.”
Milton Pedraza, Luxury Institute CEO, said: “Personal data is truly magical. There will never be any other asset that has the favorable revenue and profit generating advantages of personal data. Today, ethical brands have no choice but to embark on this trust-based, humanistic, 21st century data-driven journey hand-in-hand with customers. By mastering and executing these ten new rules of personal data, brands can perfectly align their best interests with the best interests of customers.”
What else can we say, other than we couldn’t agree more!