Should you share data with customers? Weighing the risks and rewards

By Phil Maurer. Published 25. May 2016.

In the past, data sharing wasn’t seen as a means of enhancing relationships with customers, nor was it considered a way to increase competitive advantage. Sharing data with customers was primarily a means to encourage them to get help, information and answers from less costly means than the business’s call center and customer service personnel.

But times have changed. Today, sharing useful data insights is seen by many businesses as a way to gain competitive advantage. By doing so, you can enhance business relationships, give customers reasons to be more loyal, and increase your customers’ use of your products and services.

Data sharing helps you connect with your customers

Data sharing is all about transparency. Think of it as a new way of building rapport, especially given that face-to-face interaction is increasingly rare these days. By sharing data, you show your customers that you want them to benefit from that data just as much as you’re benefiting out of it. That’s why many large corporations are already doing this.

LinkedIn, for example, informs users when their profile has been viewed and by whom. Likewise, Pandora Radio sends users a monthly report informing them of their usage stats, such as the total number of songs listened to, the number of songs the user gave a thumbs up, and so on. The report then follows up with a recommended playlist based on those stats. In this sense, it’s all about keeping valued customers in the loop to help them make informed choices that benefit both parties.

Share with caution

Unfortunately, sharing data also elevates the risks of a cyber-attack. Your network is vulnerable to breaches if the network is not up to date. Because most data is stored outside your firewall, that makes it retrievable by legitimate outside entities. It also limits the need to grant these entities access to your internal enterprise network. Data outside the firewall, though, also means your data is exposed.

To protect that data, you need a multi-layer security infrastructure, consisting of ALL the following:

• Authentication to identify users requesting to share information
• A two-firewall configuration to ensure only collaboration applications can access external data
• Tunneling to safeguard data while it’s traveling over communication lines
• Encryption to protect data from physical threats, such as theft of storage devices
• Around-the-clock auditing to monitor communications and detect possible breaches

Sharing data has enormous perks, but it also creates openings that cunning hackers can exploit. It’s imperative that data sharing does not compromise network security.

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