How to generate an ROI through  a positive approach to data privacy
In general, a business case . . .        • Translates issues into economic terms        • Justifies and prioritizes effort...
1.    Itemize risks                           For data privacy, this approach                                             ...
Cost & Risk driven         Opportunity & value driven        No differentiation         Competitive ground          Justif...
Privacy practices ARE interactionsCustomer     integrated                                               communicating poli...
Brands have measurable value also called Brand Equity, reflected in premium• P/E, or market capitalization in excess of ea...
A loyalty program translatesLoyalty & customer registration programs                                             “Do you w...
Usually refers to public → board → organization              because it’s their money.In big data, we customer → informati...
“Positive” cases depend on other business functions       • Reach outside legal, compliance, IT       • Learn partnership,...
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Bdw bryan sep 20-2012

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Presentation to Big Data World - Europe in London Sep 20 2012. "How to generate an ROI through a positive approach to data privacy".

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Bdw bryan sep 20-2012

  1. 1. How to generate an ROI through a positive approach to data privacy
  2. 2. In general, a business case . . . • Translates issues into economic terms • Justifies and prioritizes effort forward • Evaluates impacts in hindsight For data privacy, the business case sounds . . . “What will it take?” “It depends.” “Worst case?” “You’re going to jail.”
  3. 3. 1. Itemize risks For data privacy, this approach yields subjective, extreme and2. For each risk, identify the impacts sometimes threatening results.3. For each impact, estimate: Economic impact (Ie) • Not credible Probability of Risk (Rp) • What about next yearROI = ∑ Risks ∑ Impacts (Rp x Ie) Cost to Prevent4. Add, to taste . . . PV of Risks PV of Costs Cost of Capital Tax Impact Current – Future Insurance
  4. 4. Cost & Risk driven Opportunity & value driven No differentiation Competitive ground Justified a priori Measured impacts“Do” or “Do Not” decision “to what extent” Zero-Lose game Zero-Win game CRM For privacy, recognize Brand value contributions Loyalty Control
  5. 5. Privacy practices ARE interactionsCustomer integrated communicating policyRelationship interactions Cost Value recording preferencesManagement preferences observing practices objectives So: • Apply CRM valuation to Privacy Customer Satisfaction • Involve/Obligate MarketingBasis for ROI Revenue / Customer • Communicate impacts Retention Lifetime Value (LCV) A/B testingMeasure by Cross-process impact Anecdotal tracking
  6. 6. Brands have measurable value also called Brand Equity, reflected in premium• P/E, or market capitalization in excess of earnings valuation• Price, or Value/Sales compared to generics or competitors• Intangible Asset (Goodwill) applied in finance and negotiating power “Trust” efforts can be valued like those of marketing campaigns Reach – population who experience privacy messagingExpect terms Frequency – how often privacy is expressed (with other messages) Impact – ad concept of message importance  Talk to your advertising “Agency of Record”  Get subjective, authoritative impact value  Check out brand valuation methods from: Institute of Practitioners in Advertising (IPA) International Financial Reporting Standards (IFRS)
  7. 7. A loyalty program translatesLoyalty & customer registration programs “Do you want privacy?” into • Acquire more customers “How do you want info?” • Retain them longer • In sell, cross sell, up sell • Change privacy to “preferences”All of these are measured! • Use loyalty to lift privacy “frequency” Direct Marketing Redemptions and other activity • Coordinate measurement method Customer serviceTo Loyalty, privacy means “opt-out”But “My Account” also • Incentivize engagement • Offers multiple preferences • Returns data to customer
  8. 8. Usually refers to public → board → organization because it’s their money.In big data, we customer → information because it’s their data. Governance is measured by asking & inspecting.Customer care, service and sale events can embed privacy messages• Including it in greetings, confirming identity and script flow• Reiterating policy, soliciting confirmation• Monitoring satisfaction by process (expect varying impact)  Satisfaction is measureable  Transparent companies disclose CSI Analyst community premium Evidence of Consumer Protection  Like all measures, it trends, translates to financials
  9. 9. “Positive” cases depend on other business functions • Reach outside legal, compliance, IT • Learn partnership, collaborative sponsoring • Address: what’s in it for them?“Positive“ includes measuring outcomes • Even/especially when they miss expectations • Tracking needs to be baked in to process & tech solutions • Continually improving measurement methods Michael Bryan michael.b.bryan@gmail.com (703) 638-3224

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