Organisations of all sizes can benefit from the use of personal data. The common perception that only big businesses can profit from big data is a myth. More and more smaller businesses are using customer data to better understand their market(s), their offerings and improve revenue. Technological advancements have really opened up the insight market to companies of all sizes. However, the implications of using this data are the same regardless of the size of your company.
In a time where for many brands the collection of consumer data is a clandestine operation and with increasingly tight regulations, businesses need to find the right balance between responsible and smart data practices. While large organisations have the capacity to afford expensive lawyers, it is harder for small businesses or start-ups to get advice that they can action with confidence, and that as a result they might end up stuck between the desire to make data protection a selling point and the promise that vast amounts of data provide security and assured growth for the business.
Although SMEs have access to practical affordable tools to utilize big data, they might not necessarily be able to navigate it responsibly, so here’s a few tips:
1. Realise the importance of transparency
According to ESOMAR’s recent study 80% of US consumers are concerned about sharing their personal data. The less confident consumers feel about sharing their information the less likely they are to purchase from a company; 41% in fact would be more likely to buy products or services from businesses they know handle their personal data responsibly.
Being transparent and straight-forward about how consumers data are collected and utilized brings clear advantages. SMEs and start-ups need to lose the all-too-common ‘cloak and dagger’ mentality when it comes to data collection; 70% of consumers, in fact, are very likely to share personal data if they know it’s stored safely and securely, and two thirds are very likely to share it if the business is clear about why it’s needed and how it will be used.
2. Look for cost-effective alternatives
For SMEs and start-ups owners asking for expert advice is always recommended, especially when new increasingly prescriptive and complex regulations are involved. However, this doesn’t always come cheap; the majority of SMEs don’t have sufficient financial resources to recruit full-time legal and compliance officers, but they still need guidance to drive their data monetising strategies while reducing risks because their questions can be just as challenging as those faced by the large multinationals – don’t despair, there are affordable options out there!
Initiatives like ESOMAR’s data counselling services, are aimed at supporting SMEs and start-ups with ethical and compliance advice when using data. Being responsible doesn’t mean giving up on competitive advantages, with the right advice businesses can learn to be smart about their internal data collection; be able to meet external expectations on the use of personal data; and be clear about their actual practices and future intentions with the collected data.
3. Be realistic
Data also has its limitations! Although it is an unreplaceable resource for modern businesses of all sizes, organizations need to realize that collecting a huge amount of personal information comes with risks as well as advantages. Data hoarding, for example, can expose businesses to cyber-security issues; the more data a business stores the more likely it is to face risk of breaches, which can result in legal issues and permanent reputational damages. Additionally, whilst huge data stores can give the feeling of security, flawed data sets no matter how large they are, will lead to flawed outcomes that may send a business down the wrong path if blindly followed. This is of particular relevance if these data stores are being used to “teach” algorithms in a machine learning offering.
The “keep-everything” mindset is therefore not the one to adopt, especially if you’re just starting to navigate the data industry. Businesses need to find the right balance and collect and store only the information that are truly beneficial for their success. SMEs need to have a holistic approach to data and be ready to face potential challenges by learning to improve both data curation, management, critical analysis and foresight skills at an organisational level.
4. Change your mindset
The industry is currently experiencing what we can define a ‘vicious circle’; businesses are still not using consumers data ethically, resulting in increasingly tight regulations which are perceived as a threat and an obstacle to the businesses growth.
A change of mindset can be extremely beneficial, regulations should be seen as an opportunity rather than an obstacle. Changes in regulation are aimed at encouraging businesses to be more responsible, as well as providing vital safeguards for the future data intensive methods of research that are driving investment in the sector.
SMEs, start-ups and businesses in general should be careful about overpromising, the drive towards a “purist” way of data collection and use, declaring to be 100% compliant with data protection and privacy laws 100% of the time may be just as dangerous as indiscriminate data hoarding. Being realistic and accepting where a business is in their compliance journey is critical to build and foster trust with customers and regulators alike.
5. Join an ethical data association
You are not alone! Finding the right path for good data practice is not an easy task, that’s why ethical associations are working alongside businesses of all sizes to guide them and offer them practical suggestions. Being part of such associations doesn’t only help businesses make informed decisions, but it also help them gain consumer trust.
There are a number of data associations in the US, both local and international, that require members to sign up to a set of ethical codes and guidelines which go further than required law. Adhering to a code of conduct means aligning with professional standards and offering consumers the proof of your ethical principles. Joining a campaign, like the #bedatasmart one, is another way to let your customers know that you’re taking a stand in the data industry.
Through a holistic approach to data SMEs can make more responsible decisions and achieve the right balance between monetising their resources while also prioritising consumers privacy and security. Transparency should be at the top of businesses priorities; good data practice isn’t only the best way to minimize risks, but it can also boost sales.
Facing the data scenario can be overwhelming, but don’t let this make you look for ineffective short cuts! Asking for external expertise is necessary when dealing with personal information, and strategic advices can teach SMEs and start-ups to effectively navigate the industry without drowning in data hoards; always feel free to ask ESOMAR and #bedatasmart!
