Open up your mind and say, ahh...

Last month, I talked to Amazon customer service about my malfunctioning Kindle, and it was great. Thirty seconds after putting in a service request on Amazon’s website, my phone rang, and the woman on the other end–let’s call her Barbara–greeted me by name and said, “I understand that you have a problem with your Kindle.” We resolved my problem in under two minutes, we got to skip the part where I carefully spell out my last name and address, and she didn’t try to upsell me on anything. After nearly a decade of ordering stuff from Amazon, I never loved the company as much as I did at that moment.

I never loved the company as much as I did at that moment.

Remember, this was a customer-service call, so I was fully prepared for it to suck. Like most American consumers, my experience with service interactions is largely negative, whether it’s on the phone, in the murky depths of a commerce site, or in the aisles of an electronics store. I’m accustomed to the company being in control, and for our communication to be cold, scripted, and inhumane. Barbara’s congenial but no-nonsense approach was part of what made this experience different, but more important, she had access to exactly the right data about me, and that made the favorable exchange possible. The fact is, Amazon has been collecting my information for years–not just addresses and payment information but the identity of everything I’ve ever bought or even looked at. And while dozens of other companies do that, too, Amazon’s doing something remarkable with theirs. They’re using that data to build our relationship.

The Most Useful Data Set in the World

Big Data has gotten a lot of attention over the past 18 months as retail, manufacturing, and technology companies realize the gold mines they’re sitting on and rush to scour them for competitive advantage. Nearly all of this discussion, though, revolves around consumer trends, marketing guidance, new product planning, and other market-level insights. When McKinsey wrote its omnibus report on Big Data last year, the consulting company identified five different ways it can be used to create value, but only one of those methods mentions customers at all, and then only in terms of improved segmentation. The Wall Street Journal outlines several business success stories in its Big Data blog series, but it focuses almost entirely on smarter market visualization, better process maps, and other efficiency enhancers. Efficiency is a worthwhile goal, but from a customer’s perspective, data has far more power at the personal level.

In order for interactions to feel individualized and human, they must be well informed.

Perhaps the only business and marketing topic that’s been talked about more than Big Data recently is the evolution of brand relationships into two-way conversations. Now that consumers have seen what social media and mass customization are capable of, they increasingly expect this kind of personalization in their communication with favored brands, not just a passive role absorbing marketing messages. Combine this insight with the rise of Big Data, and you have a clear mandate: In order for interactions to feel individualized and human, they must be well informed. That makes data about the customer you’re talking to right now the most useful data of all.

Technically, this is hard to do. Amazon has grown large while staying fairly consistent as an organization, but most big companies got big through acquisition, and that makes synchronizing data a massive chore. Getting targeted information in front of the person who’s dealing with an individual customer, or designing for one, is still a low priority. Customer service in its various forms is still treated as an expense to be minimized, not an opportunity to be developed.

Service designers know that the opposite is true. When a customer calls the support number, sends an email, or talks to a store employee, he is initiating a conversation. You have his undivided attention, even if he’s annoyed, and that makes it a crucial brand-defining moment. He’s hoping for a conversation, but bracing for an ordeal. He knows you’ve collected information on him for your own purposes and wondering why you don’t do something useful with it. Not useful to you–useful to him.

Synchronized data is worth the expense because it’s a hallmark of human interactions. If I talk to a friend and they keep asking me for information I know they already have, I have a right to get irritated. In the age of Big Data, I hold brands to the same standards. The few that meet those standards earn my trust and loyalty. But if you’re hoping to use personal data successfully, there are a few things you have to get right.

I have no idea what Barbara was looking at on her screen when she called me up, but it gave her the information she needed about me in a matter of seconds. Someone designed the tool that delivered it and made sure she had access to it. Despite your internal divisions, I as a customer have only one relationship with your brand, and it has to be seamless. That’s what makes information tools so vital. They transfer data that’s been collected automatically or through form-filling into the personal realm, allowing us to get the awkward, impersonal, corporate conversation out of the way, and make way for the human one. The rise of portable platforms makes this possible for designers and store employees, too, not just the headset-wearing call-center folks.

When I meet an old acquaintance at a party, she remembers my name and asks one or two questions about things we discussed last time we spoke. The fact that she remembers establishes rapport; the fact that she doesn’t list out every bit of information she possesses makes me feel comfortable. Without even thinking about it, humans are very good at conveying just the right amount of information in personal conversation.

She only referenced the data that was necessary. It quickly disarmed my self-defense instinct.

Companies need to do the same. When I spoke with Barbara at Amazon, she had access to plenty of data, but only referenced what was necessary, starting with my name and the problem I was trying to solve. It quickly disarmed my self-defense instinct and made me comfortable referencing facts we knew in common but hadn’t explicitly stated. “Can you send it to the Northeast Ninth Avenue address?” I asked when we got to shipping options, even though I hadn’t asked if she had it on file. “Sure,” she said, and I smiled.

Many of us have read the story of Target’s uncanny ability to recognize a customer’s pregnancy based on her purchasing habits. At first frightening, this revelation sounds reasonable on further review, but no less creepy. Target quickly learned to get nuanced about using this insight. To avoid upsetting these customers (and their parents), they now send them flyers customized to include just a few coupons for prenatal necessities, mixed in with a random assortment of others.

That’s a partial solution at best. In the future, smart retailers will be more transparent about their data-gathering efforts and use the results more appropriately. They’ll give customers more options for controlling how much they share and how that information gets applied. Regardless of who gathered it, customers still see it as their data. They expect to be treated like the owners.

The power of being known

There’s a quiet race going on right now among brands to form customer relationships that earn loyalty in the face of increasing competition, and personal data is the surest way there. Brands like Zappos, Netflix, and Amazon are already showing the power of such an approach. Not only does smart data use empower you to treat customers as individuals, it does so without invoking many of the fixed expenses associated with improved service. Good data support doesn’t require a vastly expanded workforce, or even a new type of employee–these are conversations that people already know how to have.

In the future, customers will expect these sorts of interactions.

But imagine the benefits if you get it right. An auto mechanic who’s smart about data could tell you that your fan belt is due for a change in 2,500 miles and suggest doing it today to save future labor costs. An airline that knows more than just your frequent flier number could propose a seat based on your past selections, offer discounted upgrades tailored to your preferences, and let flight attendants know you prefer tomato juice to orange juice in the morning–even if you’re just flying coach. If they’re really paying attention, they could even learn whether or not to offer you an upsell, and in which categories to do it.

As long as they’re given transparency and control, consumers are becoming quite comfortable with these kinds of interactions. In the future, they’ll expect them. When that happens, the question won’t be “How much do you know about me?” but “What are you going to do with what you’ve found?”

Images: almagami and Everett Collection via Shutterstock

Reading this, you may have just clicked away from Yammer, NationalField, or another enterprise social network. All those status updates are creating major shifts in the way we work, say Dion Hinchcliffe and Peter Kim in Social Business by Design, available now from Jossey-Bass. Fast Company talked with Hinchcliffe about how social media is blurring the line between company and customer, killing off status reports, and making the activity steam the new center of work–and why that’s a good thing.

FAST COMPANY: Why do businesses need to become social businesses?

DION HINCHCLIFFE: Because their customers have moved: Where they used to be visiting their website, watching TV, or reading the newspaper, they don’t do those things so much anymore. The developed world primarily uses social media, and it’s been that way since 2009. A billion and a half people, and they use it more intensely than anything else that they do.

What does a highly functional social workplace look like?

One in which people narrate their work. The organization finally has visibility into what people are really working on, and it also enables the process to be open and participative. We’re talking about a natural and open process of collaborating that looks just like a Facebook feed: You see what’s going on in your company, in your department, or with your team all the time. You gather information that you need and you share the information that others need.

What are the other elements of the enterprise social ecosystem?

A fully social ecosystem has the marketplace, everyone out there that you potentially want to connect with, the customers that you already have and need to support, or want to sell to, or need to communicate with;  your business suppliers in your entire supply chain; the whole B2B story around social; and it’s of course your workers themselves. The ecosystem consists of all the connections and all the conversations happening between all those constituent pieces.

I imagine that this creates a ton of data.

This is the famous thing that Clay Shirky said, “Information overload is not the problem; you want all the information. It’s filter failure.” You can’t listen to everything that’s going on in your company all the time. You want to filter it down to what matters to you at the moment and help you get your job done. You want to be able to find it all when it does matter. Later on, you say “I know they were working on this last week and I just realized I need to know what they were doing because it affects my work.” You can go find that. You can go find that conversation, that collaborative scenario, catch up on how its going, and maybe even join in on it, or start it back up if it’s not going.

If I’m a manager of company that’s not the most technologically nimble, what should I do to move toward becoming a social business?

The farther you are away from the technology industry, the less likely you’ll find social networking to be a natural thing for you to do. There’s more work you have to do.

You can try and find out what others in the organization are doing, because I guarantee you, if you’re a medium-sized business, or a large business, your organization is already doing social in some way. Don’t duplicate it, go and find out what’s going on, and see if you can join in and adapt your part of the organization.

Other than that, you can start looking at doing something locally. We know there’s really good tools for social CRM–customer support and care. It’s a really good scenario: high value, easy to do, and it’s something you can pilot without involving the whole organization.

Involved in this is a dissolving of the barrier between business and customer, is that right?

The customer wants more control. I think companies are uncomfortable with that, but if the customers really like something, they want to tell you how to improve it and change it.

For customer care, we find a bunch of examples in the book of companies that allow customers to talk to each other, the customer ends up being the best support people. They usually know more about the product collectively than the company does.

We see a blurring of when does the company end and when does it start, because customers are actually providing many of the most valuable functions, not the company itself, in this new model.

What’s the next trend?

We’re really seeing social moving to the center of work–right now it hangs around the edges, it forms the narrative fabric of what we do, but more and more we see evidence that over the next five years, with more companies, it will be the center of work.

You can wire in all the systems you use and have one activity stream, where all your collaborations are happening, all your records that you’re working on are right there, and they’re kept in the right place. You have this place that you’re working in that also involves everyone that you need to work with, wherever they are in the world, inside or outside the company. That seems to be the grand unified vision.

Why’s that such a good thing for managers?

They could keep track of what’s going on better than they ever could before. Often managers have to ask for status reports–can you imagine status reports going away? A lot of the traditional processes we have are highly duplicative: You do the work, and then you’ve got to describe it again in a status report, and then your manager has to look at it again–all that process goes away, you eliminate that duplication. You just acknowledge the work and the conversation. You don’t need those extra pieces. It will simplify what we do and improve the cycle times.

If I’m an entrepreneur, what’s the most important thing for me to keep in mind regarding social business?

We open the book with forward from Jeff Dachis, “everything that can be social will be,” and we also say that “everything that can be mobile will be, too.” I would really look at the hot areas as those that enable that vision, and we have a long way to go of making it simple, easy, and delivered the right way in terms of user experience on the right devices. There’s a lot of work left to be done.

The hottest area right now is social analytics. The data explosion has happened. We have the collective intelligence of the company out on display–now we have to do something with it, so there’s literally hundreds of startups focusing on mining that so we can get better decisions made faster than the competition.

And avoid that filter failure.

Yes, exactly.

To get a bigger glimpse of social-to-come, read our excerpt from Social Business by Design.

Image: Flickr user Andreas Levers

For many American consumers mobile payments are still something to run away from–and fast.

That’s what research from the University of California has turned up. A new study there implies that shoppers in the U.S. aren’t yet ready for the mobile payment movement.

A large percentage of the American citizens questioned in a nationwide phone study called “Mobile Payments: Consumer Benefits and New Privacy Concerns” were found to “overwhelmingly oppose the revelation of contact information (phone number, email address and home address) to merchants when making purchases with mobile payment systems” and “an even higher level of opposition exists to systems that track consumers’ movements through their mobile phones.” 

The numbers are stark. When asked if they thought their phones should “share information with stores when they visit and browse without making a purchase,” 96% objected to the tracking, 79% said they definitely would forbid it and 17% said they “probably” wouldn’t allow it–meaning just 4% were indifferent or positive about the idea. When the question was instead about information sharing (phone number, address and so on) at the actual point of sale, 81% objected to phone number sharing–a mere 15% said they’d probably allow it and 3% definitely so. Similar figures emerged when the information shared was home address.

In terms of email addresses, survey respondants were more inclined to share, with 33% definitely or probably happy to share the transaction information. Still 51% said they definitely wouldn’t share email addresses.

And overall, 74% of resondants said they are “not at all likely” or “not too likely” to adopt mobile payment systems, while just 24% say they are likely to do so.

This all sounds very, very bleak for the future of mobile pay tech in the U.S., which is being being pushed by companies such as NCR, Square, Verifone, and even behemoths like PayPal. This news also, um, squares with a recent alert for the Center for Democracy and Technology which worries that mobile payments can “expose” more personal information to multiple groups at the point of sale than traditional transactions, even via credit card, do…right down to third party app writers.

But the numerous different parties in the mobile pay game needn’t worry yet. There may have been a stuble flaw in the questionnaire asked by the University of California team. The problem arises from the study question that asks, “would you voluntarily give McDonalds your phone number and personal details when you walk in their store?” Who among us would respond any way other than: “Of course not!”? After all, that sort of question taps into the part of our personality that is apt to click on a “don’t share my personal details with third party advertisers” when we sign up for in-store loyalty cards. When it comes to privacy issues nd technology, our default setting is: suspicious. And for good reason.

And that’s the key to unravelling this problem right there: When you do use a current-tech store loyalty card you are effectively voluntarily giving the store your personal information, and “tracking” yourself. It’s why the cards exist of course–they’re partly there as a sales incentive, to get customers back in the door via money-off offers, but mainly so the store can collate information about customers and work out what kind of products to stock, what offers to run, and what future products to plan for. And if you have multiple loyalty cards, you’re giving this information away all over the place. A similar situation exists for Groupon coupons, and their ilk. Admittedly, this is on a store-by-store basis (assuming you tick the “don’t share my information” box), but millions of happy consumers do this anyway.

A new Pew Research survey shows that 80% of American adults use the Net, and 71% of those use it for shopping–meaning they’ve typed in all their personal details into store interfaces. And, if you think about it, Google already knows much of this stuff already. And Paypal certainly knows where you spend your online money, on what items and how frequently. Facebook is also trying to get into this game too, and it knows everything about you. All these firms aggregate Big Data independantly, and though this fact sometimes gets blown out of proportion by the media or lawmakers, it still goes on and we (sometimes even merrily) participate.

For these reasons and others education is one route to making consumers warm to the idea of mobile payment. That is, eventually it might make sense for mobile pay industry leaders to join together for a marketing campaign that points out to consumer that they already share much of this highly personal information with merchants and numerous third party companies (like consumer research firms).

And then there’s the novel fact that may surprise consumers: A mobile payments standard may actually allow them better control over this data, because instead of being shared across different loyalty schemes and different merchants and third parties, it’s all corraled in one place–in their phone (or whatever mobile pay app they’re using). It’s all but certain you’ll be able to configure this system to choose how much personal information you share on each transaction, or by store, or by date, or by whatever criteria you choose. The stores themselves may then opt to not offer you discounts, coupons or other incentives, but that’s your choice.

And the Californian research team behind the paper have another solution in mind: ”Adapting provisions of California’s Song-Beverly Credit Card Act, which prohibits merchants from requesting personal information at the register when a consumer pays with a credit card, to mobile payments systems.” This would work because as the survey says personal sharing is a worry, and consumers would actually welcome controls, and “Song-Beverly could be adopted to accommodate those who wish to share their transaction data.”

Essentially, whichever of the many vying firms gets a singificant early grip on the mobile payments market will have to take part in a large-scale, open, frank, “hearts and minds” PR campaign to explain the benefits of signing up to sharing at least some personal information. And they’ll likely have to back it up with some fleet-footed lobbying.

Image: Flickr user Luz Adriana Villa A.

Via Fast Company: http://www.fastcompany.com