I live and work in Germany, a country which, as many know, has a much stronger public opinion than most countries about data collection & privacy. It seems like most people here and also in many other European countries have a general distrust against large corporations (especially US-American tech companies) and are fearful of how their data is collected and used.
While I’m quite public on Social Media platforms and like to try and use many different tech tools, I can also understand that many are worried.
Just take a look for example at all the data Google has stored on you, directly linked to your account (If you have a Google account, you can find the data here: https://myactivity.google.com/myactivity). It’s not just what you search for or what you watch on Youtube. Depending on your settings (which typically are set to record everything) it’s also a complete history of the places you are visiting, what forms of transportation you likely used to get there and and what those places are. Google got scarily good at adding a layer of context on top of your location data. And if you own an Android phone, the data sets might also contain every voice message you’ve sent and voice search you’ve performed — the actual recording plus Google’s attempt at a transcription.
The typical argument is that this gives companies like Google or Facebook an extreme power of influence on its users through targeted advertisements and selected and filtered search results and newsfeed stories. For me the more scarier thought however is what happens if that data is not with Google etc. anymore but in the hands of a malevolent third party, for example as the result of a data breach.
However as I mentioned in the beginning, there’s already a lot of debate about this and so I don’t want to get into it deeper here. Instead, I want to raise attention to a fact that’s much less discussed: Companies that collect too little data about their customers.
Why should this be a problem? Let me explain my thought. In a world that’s ever getting more and more complex, many points of personal touch and connections between a brand and its customers have been lost. If you frequently go to the same store you still will probably not have the same salesperson every time, if you frequently fly, you still won’t have the same person sitting at the check-In desk, and the list goes on. In the past, returning and loyal customers had the chance to build personal connections with brands. In many cases this resulted in a better shopping/traveling/… experience for them and on the other hand it gave brands a chance to know their customers better, be able to cater to their needs more specifically and thus improve their product or service, resulting in higher profits, lower costs or just a better brand image.
In our complex and fast-changing world, close connections between brands and customers have become much harder to forge. Nevertheless, mostly because of digitalization and the radically fast adoption of new technologies, companies today have access to a whole new set of tools to use to fill the gaps left by vanishing personal connections and come out on top.
The underlying layer for this is data. The connection of multiple sets of data creates context and context is what brands need in order to get the full picture on their customers so they can give them an adequate experience and optimize their own business model. With sophisticated online tools and a variety of sensors which are getting cheaper and smaller, it’s also easier than ever to collect all kinds of valuable data.
It seems so obvious to make use of it and to many large companies it is and has been for long.
Some of the best examples are the frequent flyer programs of the major airline networks like “Miles and More” or “SkyMiles”. They can connect a variety of data sources, data that’s been gathered online and offline to calculate prices, automatically send personalized email offers, offer you upgrades or just be “human” for example by welcoming you with your name at the check-in counter.. If you want to learn more about this, there’s plenty articles that discuss this in detail (i.e.: https://channels.theinnovationenterprise.com/articles/8649-how-big-data-is-changing-the-way-you-fly).
On the other hand it’s also shocking that there are large brands with thousands of customers every day that don’t seem to know or use the basic principles of collecting and using data to improve the customers’ experience and benefit from it themselves. I’ll tell you about an example I personally witness every week from the consumer’s perspective in the following paragraphs.
I commute for work by train once a week. One trip is about 4 hours so I spend about 8 hours as a passenger of Deutsche Bahn every week. For frequent customers that also like the flexibility of not having to book ahead of traveling, the Deutsche Bahn offers the so-called BahnCard 100. It’s an all-in subscription to use all trains (including high-speed ICEs) and almost all buses, subways etc. in all of Germany at any time with no restrictions. It’s about 4100€ per year for 2nd class and 6000€+ for 1st class. That might seem quite pricy at first but compared with the costs of owning a car and paying for gas it’s actually very reasonable if you use it as frequently as I do.
All you have to do is board a train and when the train conductor comes along to check the tickets, you wave your little black card and they’ll nod and say thank you. And exactly there is the problem: The typical amount of time the conductors spend checking my “ticket” is less than 2 seconds. No barcode scanning, no taking notes, nothing. While the Deutsche Bahn uses fancy scanners to scan almost every other regular or season ticket, they collect exactly zero points of data on their most loyal and probably best-paying customer group.
Now why do they do that? I can really only guess. My best guess is that someone at some point made the decision to bother the black card holders as little as possible when they check their tickets. Or maybe they are so ignorant as to not spend much effort on this customer group because they are already in the highest-paying group. Still, it’s quite a mystery to me.
Deutsche Bahn struggles and has always struggled with its reputation in Germany. They are especially known for not being punctual and having many problems with their trains (like ACs not working in warm weather or doors freezing shut in the winter), even though the system probably still works much better than in many other countries. I think that especially when their reputation is that bad, they should take care of the customers honoring their service with loyalty.
Just imagine all the possibilities Deutsche Bahn would have, even if they only collected such simple data as which trains the BahnCard 100 owners took where and when. It starts with better being able to predict capacities of routes taken by your high-paying customers or even just figuring out how much the cards are really used and thus knowing if you’re pricing it right. With a little bit of creativity and a look to what Frequent Flyer programs are doing it also becomes imaginable to have some special perks for your customers based on the routes they take like upgrades or hotel discounts etc. With a little more creativity these could even be monetized through partnerships with hotels etc. as the airlines do.
Even though I’m in some form of “premium” customer group for Deutsche Bahn, my experience is bad at least 25% of the time. Delays making me miss my train, over-booked trains so I’m sitting on the floor in the hallway, not functioning WiFi and so on. I’ve had the black card for almost a year now and if there was even just an “okay” alternative for the route I’m frequently traveling, I’d probably be considering it and Deutsche Bahn would be losing a valuable customer. And I’m sure they are losing many every year out of exactly the reasons mentioned. With just a little more data collected and a little more customized treatment, this could easily be mitigated, if not avoided. And all it would take is a little swipe of the magnet stripe that’s already on the card.
So please Deutsche Bahn, collect more data about me and your other customers and make use of it.
I’m sure there’s a ton of other companies, where we as customers wouldn’t mind more intelligent and customized treatment based on the collected data. Know of companies and examples? I’d love to hear about them in the comments. Disagree with my view? I’d also be happy to hear about it!