Wise Marketer Staff
In light of rising security failures, more calls are being heard for businesses to tangibly pay customers for their data.
“California’s consumers should also be able to share in the wealth that is created from their data,” California governor Gavin Newson declared in February in proposing such a “data dividend” concept. “[Tech companies] make billions of dollars collecting, curating and monetizing our personal data [and so should] have a duty to protect it.”
But is the direct transfer of wealth from corporations to customers the panacea? Let’s play devil’s advocate and explore some of the claims supporting the “data dividend” concept:
- It will increase security: If forced to pay money, companies would be inclined to strengthen protections to preserve their financial positions from damage. Yet companies already pay fines and continue to suffer breaches despite other reasons to deter them, including losing consumers’ trust.
- It will encourage customer opt-ins: A subset of customers would likely relinquish their personal data for payment. But surveys already show customers are already enthusiastic about sending their data off onto the information highway, with one big caveat: companies have to be transparent with how they’re using it. Does simply paying off customers to use their data make more sense than building a relationship that continues to add value over time?
- It provides customers with the value they deserve: In exchange for relinquishing personal information, financial restitution offers quantifiable value. Yet while data is immensely valuable on a macroscopic level, the individual is cheap. Payments are expected to be minimal. The greater value to consumers may be in reaching the next horizon of personalization should a pay-for-data system elevate the depth of data to better deliver an individual consumers’ exact wants and needs. Brands would have a greater capacity to spark lifelong bonds with individuals.
- Who Should Own Customer Data? Examining the “Data Dividend” – Wise Marketer
- California wants Silicon Valley to pay you a data dividend – CNET
- The biggest data breach fines, penalties and settlements so far – CSO
- To Regain Consumers’ Trust, Marketers Need Transparent Data Practices – Harvard Business Review
- California Wants To Copy Alaska And Pay People A ‘Data Dividend.’ Is It Realistic? – Forbes