Data versus Benefits: Deal or no Deal?
Our approach to data is ambivalent: we entrust Google with our most intimate questions, willingly distribute likes on social networks, annoyedly tick the box under new terms of use and expect companies to provide us with the most useful information possible. At the same time, reports of data misuse make us feel uneasy. After all, sharing personal data such as location, fitness or driving data in particular harbors risks and makes us vulnerable because it could be misused or used against our interests. However, the benefits of relevant offers and smart apps outweigh this, and so we consciously or unconsciously accept risks. After all, in-depth legal, technical or analytical knowledge is required to understand the complex relationships between how companies use data.Economic benefits for companiesUsing customer data brings companies from almost all industries a high economic benefit. For example, offers can be tailored to customers, retailers can dynamically adjust prices in online stores to the type of shopper and insurance companies can calculate their premiums based on the customer's risk behavior. Provided the legal framework is in place. The basis for the success of data-based business models is to take into account the views and wishes of consumers so as not to jeopardize their trust.Research project on data sharingAZ Direct and the Institute of Marketing Management (IMM) at the Zurich University of Applied Sciences (ZHAW) researched the situations in which people are willing to disclose personal data. The aim was to uncover the driving forces and barriers when dealing with personal data. To this end, analysts from the ZHAW and AZ Direct developed a Willingness-to-sharepersonal-data-Index (WTS-Index), which can predict which situational characteristics lead a person to share their data.
Extensive data collectionTo develop the WTS Index, IMM researchers conducted an online experiment with over 20,000 people in Switzerland. The target group was contacted by e-mail. The e-mail addresses were taken from the AZ Data World Consumer with communication data on 6.3 million people and more than 100 associated characteristics. The participants were presented with scenarios in which they had to decide whether or not they would share their data. They knew how the data would be used, whether it would be collected anonymously and what benefits would result for them. Based on the five variables of industry, data type, field of application, benefit and anonymity and including 13 personal variables, there were 1600 possible scenarios.Anonymous evaluation of the interviewsThe online interviews were analyzed anonymously and enriched with characteristics from AZ Data World Consumer. In this way, data protection standards were met. Neither the IMM nor AZ Direct ever had simultaneous access to the names of the participants and their answers in the online experiment.personal preferences decideThe results of the analysis showed that each variable in the scenario had a significant impact on whether individuals would share their data. In other words, it is important for consumers to know:- who is asking for their data,- what kind of data is being asked for,- how this data is being used,- what the benefits are for them.Socio-demographic factors, household composition and language region also had an impact on whether a particular scenario led to consent. These results are hardly surprising: each person trusts different brands or sectors and can be persuaded by different incentives.
Modeling the WTS indexIn a final step, the analysts developed a forecasting model for the probability of any group of people being willing to share data. The collected data with the personal and situation-specific factors formed the basis for this. This makes it possible to predict how likely it is that someone will provide personal data to a specific company for a defined purpose. The index can also be used to predict the effect of changing each variable in the scenario, socio-demographic or household composition of a group of people.Practical test as part of pilot projectsThe index is currently being tested in practice. This involves comparing the willingness-to-share (WTS) of an index-selected group with a randomly selected group. If the first group is significantly more willing to share their data than the randomly selected group, then AZ Direct's WTS Customer Scoring proves to be a useful tool for identifying and selecting target persons for data-based campaigns. The pilot campaigns have recently started and the first results are expected at the end of the third quarter of 2018.Benefits for companiesIf the test results are positive, companies can use the WTS index to select people who are more willing to share personal data for future campaigns. It does not matter whether the target group consists of existing or potential customers. AZ Direct can also predict what incentives are needed in a situation or industry to increase the willingness to share data. People who are not willing to do so are therefore not contacted in the first place. With WTS Customer Scoring in combination with WTS Consulting, AZ Direct will be offering companies advice on developing a data-based campaign and identifying the most promising parameter constellation from the ground up from the fall.
