How GCC companies can use data to close trust gaps

As companies understand and explore the need to collect data, here are five ways to harness the business imperative of building trust.

In brief

• As businesses crunch and analyze more data, opportunities will not only multiply for building customer trust, but also for losing it.
• Companies must identify the trust gaps in their customer relationships and act to close them.
• Harnessing the power of trust and data is vital to create long-term value for the business.

In the long commercial traditions of the Gulf region, there is nothing more valuable than the trust between a buyer and seller. As GCC companies collect and analyze more and more data about their customers, that trust will be put to the test.

Attractive opportunities to bolster relationships with existing customers and win new ones await businesses that learn how to derive insights from data with the help of technology. Leaders of many GCC companies understand this and are seeking to build the digital and human capabilities they will need to leverage data effectively.

As their data efforts gain momentum, companies need to protect against the emergence of trust gaps — cracks in relationships with customers that develop when the latter begin to doubt that the companies they are dealing with, are doing right by them.

Executives in the GCC ought to be aware of the data privacy debates that periodically occur between businesses, regulators and consumer groups in other parts of the world. That consumer and regulator activism on data has been less prominent in the Gulf should be no cause for executive comfort. Litigation or fines may or may not result from the emergence of trust gaps, but the ability to generate long-term value for the business surely will.

How trust gaps manifest themselves

Data-related trust gaps can emerge in two ways:

• When a company misuses or fails to protect the data a customer has provided
• When a company fails to use the data it gathers from or about customers to provide a better product or service

The risks of the first type of trust gap emerging are heightened in the age of data monetization. The risks are especially high when businesses seek to earn revenue directly from the sale of customer data to third parties such as marketing agencies or data clearinghouses. Customers may opt into this, but they rarely approve of it.

Security breaches that result in the loss of data to cyber criminals — an unfortunate reality of the digital age — also affect trust, if customers perceive the company’s cyber protections to have been weak.

The failure to use data effectively, however, is more likely to be the source of a trust gap in the Gulf, as so few GCC companies currently do this. Its telcos (telecommunications service providers) and banks are a partial exception, but they too have only scratched the surface of data mastery.

Consumers in MENA, including the Gulf, are becoming more willing to share their personal data, if doing so brings benefits to them or society.1  Many consumers, for example, want the companies they deal with to provide a more personalized product or service using such data. If instead, the company continues to make generic offers, the result is likely to be a poor customer experience and, consequently, reduced trust.

Telcos, for example, already know a lot about their customers, such as about their travel patterns and preferences, gleaned from roaming data and mobile payment transactions. Customers would likely welcome a personalized offer of travel insurance from the telco or recommendations for restaurants that are based on that data. This could help to build trust and strengthen a relationship. Failure to provide this level of service, by contrast, is likely to give rise to a trust gap.

Mind the gaps

For most companies, closing or avoiding trust gaps requires three actions:

Identify what’s missing in your customer data

Companies should know what in their sector represents a rich data set for any customer and determine what variables are missing in their data sets. It starts with the most basic information: name, postal address, phone number and email address. A rich data set will also include information about a customer’s household. From there, it is important to understand the company’s share of wallet in the household. For example, what products and services does the customer’s spouse and children buy?

Take steps to obtain the data

Launch campaigns to acquire missing data directly from customers. These could take the form of raffles at petrol stations that require information about individuals’ cars, or loyalty programs that offer customers benefits such as discounts, air miles or other rewards in return for data.

Derive insights and act on them

Trust that is built through personalization or other ways that demonstrate the company’s investment in the customer relationship can eventually extend to other members of the household. A bank, for example, stands a good chance this way by ensuring that the currently unbanked children in the household will also grow up to be its customers. The potential lifetime value from this one household is significant.

Five ways that harnessing trust will benefit the business

Harnessing the power of trust and data benefits a company in a variety of ways:

• Gaining near real-time visibility into customers, markets, ecosystems, processes and finances while uncovering new insights for the organization
• Prioritizing actions and accelerating decision-making, close to the point of impact
• Understanding, anticipating and preparing for the future, proactively and accurately through proprietary data and insights
• Networking at scale: connecting people and data across internal and external functions, increasing coordination and reducing inefficiencies
• Discovering new sources of value and improving speed to innovation through insights

A continuous balance

Building and maintaining trust in customer relationships is a continuous endeavor. It requires constant data collection and continuous efforts to improve the companies’ analytical capabilities to be able to draw better and better insights from data. Digital technologies are obviously useful tools in helping to achieve this, but they are not the only ones. Over-reliance on technology can sometimes be counterproductive. In this part of the world, businesses can never forsake the human touch as their customers value it.