The Virtues of Data Sharing

Many businesses share their customers with other businesses, and yet if asked if they would share data about their customers, even confidentially, they run a mile. 'What! Share my customer data? Not me...the competition will steal my customers" Why do we assume we'd be worse off?

Let's think about it - what percentage of your customers are truly loyal - let's say 50% - that means the other 50% are now other peoples customers. Of the 50% loyal to you, how many of them are exclusive to you only? Chances are they probably shop around now. If 50% are not going to come back, maybe they'd be better value for other businesses - and if they did you the same favour? Would you both be better off or worse off?

"Which 50% are the loyal ones then?" you may ask - well your data should tell you that already, based on how many have bought once, twice or more times. You may already be communicating to them differently, maybe not. Regardless, if they are loyal to you now, they'll probably stay loyal to you no matter what - data sharing won't stop that.

Now, reality check - what business would love to have loyalty as high as 50%! So if you buy this argument at 50%, then it only becomes more compelling if loyalty is any lower, which is the case for many small businesses operating in the Tourism, Leisure and Music industries. Customers don't mean to be disloyal, but they do like variety, and want to experience different places, sounds, tastes and sights. Can't blame them...

In summary, between you and your so called 'competitors', you may be able to increase the overall loyalty of your respective customer bases, by coordinating your marketing efforts, based on more insightful analysis on shared data. Keeping customers loyal to the category, say destination, our Artist genre, or series of events may be smarter than trying to compete for a slice of a smaller pie. Competitors, or collaborators?