Companies have put a lot of time and energy into collecting, managing, and securing consumer data. But they’ve paid far less attention to the preconditions for actually using the data. It’s an oversight that could play a big role in determining the winners and losers in certain industries.
As the volume and value of consumer data continue to grow, trust will become an increasingly potent competitive weapon. An organization that carefully stewards its usage of consumer data will find that its customers are more willing to allow it to access and use their data. As a result, it will have a chance to fundamentally outperform any peers that are regarded as ineffectual caretakers.
To earn the right to use data, a company must do two things. Internally, it needs to establish a clear policy about data use—one that is understood and accepted by the C-suite. The policy should spell out how and when the company will ask for permission to use data, the steps it will take to oversee use of the information, and the protocols and metrics that will deter and detect violations. Externally, the company must be transparent with its customers. It should be upfront about the policy as well as the safeguards designed to uncover and report any potential problems.