The Newtrain Manifesto

Next month Deborah Schultz will be presenting a keynote called Smart Data: The Struggle to Enhance Customer Experience in a Digital World at the Direct Marketing Association’s upcoming Marketing Analytics Conference.  In preparation she bounced the topic off of the VRM mailing list asking how the crowd there would challenge this audience.  Naturally, I had a few ideas.

Keep in mind, this is a room full of marketing people.  These are the people who, during his CLIO acceptance speech, Jerry Seinfeld described as lying for a living.  These are the people I’ve described in more uncompromising terms as The Enemy.  If I were on that stage, what would I say to this crowd?

How about “Let’s be friends.”

The challenge
As challenges go, that’s both pretty vague and seemingly impossible.  Every motivational coach in the world will tell you the importance of specific goals and “be friends” isn’t measurable.  They also tell you it’s OK to shoot for that impossible goal, but to break it down into achievable sub-tasks.  How does that change my message to the DMA crowd?

Here is my revised challenge: Imagine a world with much less personal data and ask yourself what the business model looks like in that world.

Say whaaaaat?
Consider Amazon Echo versus Ubi.  Echo provides voice-control services, is always listening and sends voice data to the cloud for processing.  Ubi also provides voice-control services and is always listening, but the voice processing is local. Voice recordings that don’t go to the cloud can’t be abused or lost by the vendor, or shared with unnamed 3rd parties.

Furthermore, Ubi has an open API so the number of devices to which it will interface and the number of services it performs can reach parity with Echo, and even surpass it.  Once Ubi performance meets or exceeds Echo, there will be two roughly equivalent devices in the market where one is privacy-enhancing and extensible while the other is not.  At that point, why would anyone in their right mind buy Echo?

The answer is in the architecture.  Ubi doesn’t have my Amazon transaction history.  Echo does.  Amazon can compete with Ubi by finding ways to give me my own data back and to enrich and analyze it for me.  Amazon and I both have my transaction history.  Amazon has it in machine-readable form whereas I have to enter it manually or resort to screen-scraping to capture it, but since I’m party to my own transactions, Amazon cannot keep the data from me.  Their only choice is whether to make it convenient for me to access it.

Been there, done that
The history of smart meters is instructive in this discussion because we’ve just seen this comparative customer calculus play out there.  Power companies faced such strong opposition from consumers they had to resort to lobbying for legislation to make smart meters mandatory.  The big issue was always privacy.  All the utilities get is an aggregate signal of all the electric devices in the house and it was still considered invasive so they pledged to sample only at long intervals.  The effect of all this was that utilities couldn’t figure out why consumers don’t like data collection and that the only way to roll our smart meters en masse was by force, hence the legislation.

Meanwhile, Plum (formerly Ube) crowdfunded power meters built into electrical outlets and wall switches.  Not only do these devices meter power usage, but metering on the wall outlets is per socket, and in real time.  That’s as fine-grained as it gets.  Did consumers run screaming?  Hardly.  The campaign raised $307k or about $10k/day on Kickstarter, plus millions in incubator and VC money.  So, it isn’t that we don’t like data collection.  To be precise we don’t like data collection when we don’t get the data.  What Plum proved was that we LOVE data collection when we do get the data along with an open API, and that we’ll beat down your door to get it rather than have to build it ourselves.

New Clues

So here’s my pitch to vendors (marketers) in Cluetrain Newtrain style:

 

Butch Scarcity

In the world of atoms, scarcity creates value.

This is proportional.  The more scarce something is the more valuable it is.

It is therefore natural to assume that which is valuable must be scarce.

Personal data generates revenue, therefore it must be valuable, right?  So you guard that personal data jealously. You try to prevent data about me from leaking or spreading, even to me.

 

The Abundance Kid

But this is not atoms.  This is bits.

The interesting thing about bits is that they become more valuable with abundance, not less.

If you give us our own data, you still have it.

 

It’s our data anyway

And as a party to the transactions that generated the data, you can’t keep us from having it.  If nothing else, we always have the option to manually enter it.

Your options are whether to make it convenient or inconvenient for us to obtain our own data.  You need to differentiate yourself in the market, which of these options do you choose?

 

The scarcity is in the relationships

It is we individual humans, your customers, that are the scarce resource.  We are still made of atoms.

Give away the data, you still have it.  Turn away the customer, you have nothing.  Not even the data.

So if it takes giving us our data to keep us, THEN DO THAT.

 

Reframe, retool, reunite

This isn’t a conversation about privacy.

It’s a conversation about respect.

It’s about trading up from customers to strategic partners.

Don’t build us an A P P.

Build us an A P I.

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