Data is every forward-looking company’s most valuable asset necessary for developing business strategies and powering up lucrative opportunities. Thought leaders even say data is the new oil.
Like oil, data must undergo a refinement process to become valuable. Companies must convert raw, unstructured data to structured data to make it usable and create an essential decision-making tool. However, many organizations struggle with data sourcing.
As much as 99% of companies face issues with customer data, with 96% having difficulty gathering timely, accurate information, according to Pitney Bowes and Forrester Consulting. That’s why many companies turn to online data marketplaces.
There are B2B and IoT or sensor data marketplaces, but another type is gaining global momentum – personal data marketplaces.
What is a personal data marketplace?
A personal data marketplace is a B2C (Business-to-Consumer) platform where consumers can sell their data to businesses. They are GDPR-compliant online data markets, as they contain consent-based audience information that organizations can use to improve products and services.
With consumers becoming aware of companies’ customer data-mining efforts, more people want their piece of the pie. They can now take back at least some control over their publicly available data by choosing what information they want to share, who will use it, and how they’ll leverage it.
Personal data marketplaces allow individuals to share and monetize their demographic, geographic, psychographic, and behavioral data. They can set fixed prices or earn money through ongoing data sales and usage-based agreements. Depending on the platform, they can also receive various discounts, gift cards, and cryptocurrencies.
Most personal data platforms use blockchain technology to ensure data stays authentic and transparent and all transactions remain credible and secure. They use cryptography to record transactions chronologically in a public ledger, allowing consumers to see who buys their data and how they use it.
These marketplaces don’t own consumer data but rather facilitate the exchange, ensuring a secure, transparent, cost-effective way to share data. As such, they benefit both individuals and businesses.
Business benefits of personal data marketplaces
Since a personal data marketplace is a data-driven ecosystem of comprehensive, enterprise-ready customer data, it can provide your company with incredible benefits. Here are the most notable benefits.
Seamless external data sourcing
Gathering customer data from multiple external sources is vital for continuous improvement, but it can be time-consuming and overwhelming. Most external sources contain unstructured data that requires systematic organization before you can store it in your CRM database.
A marketplace where your target audience shares personal information can help expedite the process. You can purchase relevant, structured data to save time and resources and enhance your contact data enrichment efforts.
Access to accurate and up-to-date customer data
The latest customer data platform statistics show that businesses pull consumer data from approximately 28 sources. Still, poor-quality contact data accounts for about 20% of their database records, and roughly 47% of new data they collect isn’t entirely accurate.
Gathering information from multiple external sources can lead to inconsistencies and expensive and lengthy data cleansing.
A personal data marketplace solves those problems by providing access to accurate, up-to-date customer data, helping organizations eliminate critical errors in their CRM database and sharpen their competitive edge.
More accurate predictive models
Predictive models for customer analytics tools need vast data to identify patterns and trends and make accurate forecasts. The more customer data you feed into your AI and machine learning models, the better insights you’ll gain for data-driven decision-making.
However, gathering inaccurate, incorrect, incomplete, and inconsistent data can flush your efforts down the drain.
Reliable personal data marketplaces offer quality assurance from trusted sellers, providing you with accurate, correct, complete, and consistent information for data-driven forecasting.
When you consistently gather relevant, up-to-date, accurate data, you can continuously improve your products and services.
Personal data platforms can shed light on your target audience, including their likes, dislikes, spending habits, income levels, purchasing behavior, and opinions. You can buy data sets containing any personal information consumers are willing to share for a passive income and better brand experiences.
Gathering that intelligence can help you better understand your target customers and personalize their experiences with your brand. You can improve your marketing and advertising strategies to attract new and retain existing clients, eventually boosting sales and revenue. You can’t do that with poor-quality data.
Data privacy compliance
Thanks to blockchain technology, personal data marketplaces have a decentralized KYC (Know Your Customer) model. They impose strict privacy regulations, enabling individuals to sell private information in a secure environment and companies to stay compliant with privacy laws.
These marketplaces ensure data sovereignty, helping organizations stay in legal waters when sharing personal and confidential data across borders.
Since consumers share their data willingly, organizations worldwide can stay compliant with all the privacy laws and regulations, including the GDPR, and avoid legal issues.
When consumers share and monetize their data in a safe and transparent environment, enabling businesses to improve and provide better customer experiences, they activate a chain reaction.
More consumers start following their lead, supporting more accurate predictive modeling and creating a high-quality data-driven ecosystem that continuously improves customer experiences. This never-ending loop can benefit all interested parties, helping businesses gain a competitive edge and consumers receive real value.