There has been a lot of chatter recently about “data privacy” and whether the federal government will pass legislation or leave it to state action. Last week, 51 major CEOs signed a letter to Congress asking for a federal privacy statute. This echoes the U.S. Chamber of Commerce’s position, which has proposed model federal privacy legislation that protects consumers without stifling innovation.
Who opposes said law? In very simple terms, those who favor consumer-friendly (or “pro-privacy”) legislation fear that businesses will misuse information about people in their pursuit of profits. In a letter written in favor of the California Consumer Privacy Act, regarded by many in the tech/business community as going too far in favor of privacy, supporting organizations write that “irresponsible data practices lead to a broad range of harms, including discrimination in employment, health care and advertising, data breaches and loss of individual control over personal information.”
Consumer data protection is certainly important, but any law that goes too far would be detrimental to businesses that rely on data for innovation. That applies even more to businesses that have not yet realized the significant financial value locked away in their enterprise systems. When revenues decline, customer loyalty diminishes and profit margins shrink, businesses may realize significant financial value by tapping into data they already own; “data monetization” could be the saving grace for many businesses on the brink.
Selling data is the most obvious way that businesses can make money from the data they own, but this fuels the fire of those advocating for more restrictions on data usage. The following are a few options – other than selling it – for businesses seeking to make (or save) money from their data:
- Enhance Products or Services: Learn more about customers’ secondary problems and solve them by enhancing an existing product or service.
- Drive Sales and Marketing: Understand better why and how customers use a product, then use the information to improve leads and targeting.
- Reduce Costs: Use data to streamline operations, manage inventory or upgrade high-cost business tools.
- Improve Productivity and Efficiencies: Optimize resource allocations to improve employee performance, operations and processes.
- Expand User Base: Discover other business categories or new customer types that could benefit from an existing product or service.
- Reduce Risks and Improve Compliance: Understand your “blind spots.” By reducing your risks and enhancing compliance, businesses are able to charge more for certified products and services.
- Develop New Products: By discovering gaps in the market and customer problems that have not been solved, companies can launch a new product or service and/or enter a new market.