Data economy has become a popular buzzword over the last few years. With 2.5 quintillion bytes of data produced every day, this is not surprising.
When we talk about data as the “new oil” or revel in the added value it generates, we should remember that there are people behind it and listening to their needs has real business impact. Companies that rely on user data are moving from a traditional seller-and-buyer relationship with their customers towards one where both parties are providers and depend on each other.
It’s time to start meeting users on equitable terms.
Taking a human-centred approach to data allows companies to better understand their user base and win their loyalty. Trust is needed to build more sustainable relationships.
Let’s look at a three-step process for keeping the data economy human.
Start with a user need
Why does it matter?
From a user’s perspective, a significant share of our data is currently unusable. It is locked in silos or monetized through sales to third parties. The result is unsatisfying experiences, different ecosystems not talking to each other or, in a worst case scenario, an invasion of privacy and security. Even established corporations that have collected lots of data throughout their history are unable to create a fully comprehensive view of their customers.
7 out of 10 of the world’s most valuable companies are tech companies and most of them have built their business around data. These companies have disrupted entire industries by understanding what consumers want before they asked for it, personalizing and improving digital touchpoints and eliminating pains.
Data is more than a resource to accumulate and sell - it is a tool for understanding people, driving innovation based on their needs and providing value in exchange.
How to get there?
Instead of gathering as much data as possible and using it to justify decisions or simply selling it, goal-oriented data collection focuses on the user and helps ask and answer the right questions to begin with. Quality trumps quantity - identifying which customer interactions & business questions are most important and what data will be necessary to answer or improve them.
What information is critical to put user data into context and create real insights? What existing data sources can already be used or need to be created to understand people better?
Value the user's trust
Why does it matter?
As a society, we are starting to realize how much our data is really worth and becoming more protective about it. Using people’s data to create value will require their trust. Scandals, like the one starring Facebook and Cambridge Analytica, have made this very clear. For many companies, it is not about gaining customers' trust, but about preserving with the shifting mindset of tech-savvy consumers.
Data security and privacy have become a part of the branding of many digital products, such as Whatsapp and Facebook. Companies have realized that the topic matters to more and more users and are trying to start a conversation - but is this enough in the long run?
Privacy and security are important rights, but currently, due to lack of regulation, they are treated as a consumer interest issue. What this means is that companies might address them in some cases, but consumers can not rely on this. History has shown how easily these responsibilities can be neglected.
Just talking about data security, privacy and justice or treating these values as an “add-on” for a product is not a sustainable approach. In order to meet the expectations of future users, companies will have to build for trust from the start by including it in their design process.
How do we get there?
Providing more transparency in a product is a good start. For a lot of people, data collection is still a black box. Many are not aware of the different types of information companies are interested in, how it will be applied and why companies want it.
Trying to hide the fact that data is being collected in some inaccessible terms & conditions implies negative consequences for people. Explaining to users how sharing their data can make an experience better is an important design opportunity. It can help fight the distrust that many users have succumbed to by now and it has the potential to reshape the current conversation about data. Currently it’s seen as a great business opportunity for companies, but users face the risk of being exploited.
Ideally, both parties should benefit.
After communicating the topic more proactively, the next step should be providing better infrastructures for users to access and control their data. In many products these kinds of controls are pretty inaccessible, hard to understand, not available at all or hidden in settings that users rarely touch. Or find.
To build trust, settings to control user data need to become more prominent, understandable and engaging.
Win the user’s loyalty
Why does it matter?
Brand loyalty has taken a hit from digitalization. Consumers are more tech-savvy. They value flexibility. Switching services will probably just get easier in the future - especially when the service is not tied to the purchase of a physical product, like mobility or streaming services.
Trying to “lock” users in a service by making it hard to leave may lead to users feeling disrespected. They will probably start looking for more flexible options. One service might help you leave the other. Mobile operators are a great example. They’ll automatically transfer your number from an old contract or pay you back a part of the cancellation fee. With users having the right to demand their data from one service and give it to another, this could make switching even more attractive and easy.
How can data encourage digital loyalty?
How to get there?
More and more consumers tend to value time and convenience over actual transactional rewards. In the future, loyalty might be less about financial incentives, bonus points or reward systems and more about the value of being able to integrate a product seamlessly into life and staying engaged with it in the long term.
Products like Netflix and Spotify that learn about our preferences and hyper-personalize their experiences down to the smallest details have shown how to use data to build strong relationships..
Today's data landscape goes beyond databases of names, locations or credit card numbers. It is about the real-time flow of data from cars, phones, social media or IoT devices. Combined with contextual data, this becomes valuable information about our behaviour - the way we drive, shop, communicate, make decisions and spend our time. Products have become windows into users’ lives, with the ability to evolve alongside them through different moments or even life stages.
With this data fueling the world around us, could being cut off from our trace of information feel as disruptive in the near future as having our phones or WIFI taken away feels today?
It is up to companies to empower users with the right infrastructure for their data
The conversation about data privacy, security and justice has seen a lot of progress. Hopefully, we will soon see products change even more dramatically and being driven by these core values.
Connecting different puzzle pieces of data so that companies can learn about users and deliver perfectly tailored experiences should not be an uncomfortable scenario for the user, but one that puts people in the driver's seat. Now it is up to companies to provide the infrastructure for consumers to share their data without losing ownership - and even encourage data stewardship by providing the necessary controls and information. In a society becoming increasingly critical about technology's impact on our lives, handling data in a more ethical and human-centered way is a step towards creating a more sustainable business.
*Research conducted in collaboration with Bence Àgoston (UX/UI Designer), Johannes Stock (Head of Design) *