With the amount of data gathered by businesses continuing to grow, it's time for many firms to appreciate that there is a lot more than a collection of ones and zeroes sitting in a data centre somewhere – but actually, this information can be a genuine asset with real-world value – provided that they have the right tools in place to take advantage of it.
At the moment, this is something that too many firms are not achieving. There may be several reasons for this, such as not having the right data analytics tools, keeping data stored in old-fashioned silos that make it difficult to extract the right details, or simply that firms do not realise the potential gold mine they may be sitting on.
So if firms are not effectively using the details they gather from their customers, they could be letting a large amount of value slip through their fingers – and this will be a critical error at a time with consumers are becoming much more savvy about just how much their information is worth.
Recent research by Orange revealed four out of five people know that their personal data has value to a business – with 78 per cent agreeing that the closer they are to a brand's ideal target demographic, the more their details will be worth.
The study also found consumers are willing to put a monetary value on the details they provide to organisations, which is something businesses need to bear in mind when it comes to using this information and providing services in return.
It found that on average, consumers consider the culumative value of their personal information to be approximately £140. However, if they are sharing it with a company they are unfamiliar with and may be less certain about, they place an additional premium on their data, bringing its perceived worth to almost £200.
But this will mean higher expectations from customers about what firms use this data for – so it will no longer be good enough for businesses to file this information away in data warehouses, with the assumption that at some point in the future, they may employ big data analytics to search for insight. Instead, in today's highly data-aware environment, where issues of privacy and security are forefront in the minds of many consumers, they will want to know they are getting something in return.
Daniel Gurrola, vice-president of Business Vision at Orange, added: "As the perceived value that consumers place on their data can change depending on the relationship they hold with the organisation, companies must consider not only how they convey what the customer gets in return for this data exchange, but precisely how the data is being used and where, in order to build that essential trust."
The pressure will therefore be on businesses to understand exactly what the information they gather is worth in real-terms to the organisation. And in many cases this will mean overhauling their current data analytics processes to improve on the insights gained from these details will be essential.
Accenture noted there are several steps that companies must go through in order to understand the true value of their data, which include evaluating their information on key criteria such as what it tells them about customer demographics and behaviour, and how this can be translated into real-world actions.
The firm stated: "To identify data monetisation opportunities in an informed and results-driven manner, companies must assess the value of enterprise data, determine how best to maximise its potential and figure out how to get the data to the market efficiently."