The big data industry isn’t known to soak up the spotlight, nor does it take up much room in the headlines, yet it is by far one of the most influential forces in business today. From the local brick-and-mortar stores to towering multinational conglomerates, the data that this sizeable slice of the IT sector collects is nothing less than priceless. What amount of money would businesses pay to understand who is likeliest to buy their products, where these customers can be reached, and what they would want to hear? Millions?
Billions, in fact. The global big data market achieved revenues of over $33 billion in 2017, which is no surprise given how expansive it is and how many entities rely upon it. “Big data” is just a nickname – it refers to the colossal datasets that a modern business can generate, but the most important part of the equation isn’t vocalized in this moniker.
In truth, big data’s real purpose is to derive value from oceans of chaotic, disorganized information – usually by harnessing technology to dissect it and create an actionable story.
This is called analytics, and it’s close to the heart (and bottom line) of any serious enterprise. A company that can find the right analytical balance can invest in mining data insights – whether in-house or by paying a big data firm – and produce returns that eclipse their sunk costs.
One of the most purposeful uses for these insights is to encourage customers to engage with businesses more frequently and in more meaningful ways. While the strategy is sound, the foundation upon which it is built is more prominently displaying its flaws and drawbacks. Being so heavily monetized means that business analytics can easily be led astray for the sake of profit, and no alternatives threatened this status quo until blockchain came into the picture.
Individual data points are dumped into what’s called a data lake before being picked apart and assigned relevance to a business or individual analytical campaign. However, regardless of the efficacy of the method of filtration and analysis, there is no guarantee that the data itself is clean. For this reason and others, only around 38% of executives trust the customer insights delivered by their analytics departments.
An unfortunate reality that these CEOs and CTOs struggle with is that it’s not difficult for false information to spill into their lake. Without a proactive way to verify the authenticity of any single input, conclusions drawn from such data can be compromised.
Blockchain turns this notion on its head. Its distributed database behaves like an open ledger to record and organize transactions, displaying the timestamp and other critical details of all exchanges of data taking place on the chain. The system will not process transactions that aren’t verified, meaning that analysis of blockchain data is more accurate and transparent than alternatives. Though this notion is impressive, the young ledger technology also helps to produce new monetization models for the data analysis industry.
Currently, companies with the most popular platforms and applications make most of their money by selling raw customer data to others. They collect it simply by asking users to surrender this data in exchange for a free experience.
When these gatekeeping entities turn around and sell it, their buyers are still much higher up on the pyramid than those who will use it to engage customers. The data will likely pass through many more hands before being put to good use, adding to the price tag with each pass.
However, companies on the lower rungs of the data ladder aren’t motivated to depose this top-heavy industry, because customers who generate the data have no control and therefore pose no threat. Blockchain evolves this notion as well. Its decentralized network effectively eliminates middlemen, allowing users to regulate who can access their data and who can’t.
Though one might believe this cuts out businesses entirely, it’s truly beneficial for them. Users are selling their data on a free market, producing prices that are undoubtedly more competitive than those currently available from centralized models.
This accelerates the sharing of data, improves its overall quality, and helps companies to better measure customer engagement in real-time. Instead of deploying entire departments to piece together insights and install them into existing company assets, firms simply need to use the blockchain platforms already available to properly incentivize participation.
COMPANIES ON THE CUTTING EDGE
One powerful example is found in Sandblock, a firm that uses cryptocurrency to bring companies and their customers closer together. Sandblock takes the concept of retail discounts, coupons and loyalty points and puts them on the ledger, making them faster and more flexible to redeem while enabling companies to do more accurate analyses of customer behavior.
Instead of using expensive, questionable data to help inform engagement campaigns, businesses using Sandblock can pay less to get the best information directly from customers who are already engaged and willing.
Another instance of blockchain being used to motivate better engagement is Shopin, a startup that uses the idea of democratic data gathering to build comprehensive shopper profiles. The platform incorporates a cryptocurrency wallet that shoppers can use to purchase online, then takes the data generated and helps retailers make sense of it.
Those who buy access to relevant customer profiles can gain a greater understanding of those customers and their actions. Retailers will be able to do more than guess at why any specific shopper abandoned their cart, for example, and pay that shopper for the privilege.
Blockchain startup Benebit is also developing a currency for customer loyalty, but employing different ancillary technologies to make it happen. Instead of an entirely chain-hosted ecosystem, Benebit is introducing an application and the Benecard this year, which is essentially a hardware wallet that holds all of one’s loyalty points. The card can be used to buy goods at the network’s partner retailers, whether online or offline at the store itself.
IS BLOCKCHAIN ENOUGH TO TURN THE TIDE?
Blockchain provides transparency and integrity for the ledger and the processes that build its blocks, but not for the analysis of all the data. This role goes to creative blockchain firms who find a) ways to incentivize users to share their personal data with retailers and b) strategies for retailers to harness an advantage greater than the one they currently employ in the centralized paradigm.
Thankfully, this is blockchain’s modus operandi. The number of companies who have taken blockchain and run with its promising attributes is staggering. This leaves anyone familiar with the subject to conclude that the analytics and engagement landscape will soon be unrecognizable.
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