I never imagined Warren Buffett weighing in on the Personal Data and Privacy conversation but his ideas regarding value are important to note.
Rather than get into a price war, you’re better off keeping your price stable and instead invest in the three things that are more important to customers than price:
Warren Buffett Says Discounts Are for Dummies by Geoffrey James at Inc. Magazine
1. Relationship. All things being equal, most customers would rather do business with their friends rather than with strangers. The same is true even if things aren’t equal, btw. To build your relationship power, invest in your sales team and the tools they need to connect with your customers.
2. Convenience. Of all the resources to which your customer has access, the most rare and valuable is time. Therefore, if you make your product easier to buy than the competition, you can charge a higher price than that competition. Classic case: Apple won a huge share of the music market by making it easier to buy a song than to download it for free.
2. Uniqueness. Finally, if your product has something that your competitors lack and your customers want it badly, they’ll pay extra for it. The challenge here is finding a feature that’s 1) difficult for your competitors to imitate, and 2) that you can convince your customers to view as uniquely valuable.
You may have noticed that the list above is just another way of expressing the three basics of marketing: 1) customer relations, 2) channel development, and 3) product strategy.
I still hold the belief that people will not pay for ‘privacy’ per se, because the risks are too intangible and outweigh the benefits of using the features of the free world wide web. So perhaps ‘Privacy by Design‘ is a bum steer.
Despite sovereign identity, personal data stores and personal data monetization products being available and ready, and entirely logical, adoption has been slow. Perhaps that should tell us something. That consumers are not seeing enough value in using them, certainly not worth justifying the effort.
Which is where RELATIONSHIP, CONVENIENCE and UNIQUENESS come into play. If a business is offering those three things to a consumer, then they will pay once and pay again.
If our personal data could be used in ways which change the nature of our relationship with a company, that provide more convenience that without it, that allows a company to develop a unique competitive advantage, then businesses will see profit and sustainable revenue from it. To achieve this, the businesses’ use of consumer data will need to be explicitly declared and as part of the proposition, consumers will have some degree of agency over that data.