Data on who your customers are and how they use your products could be one of the most valuable assets of a business.
Customer Data Could Drive Innovation
Businesses profit when they deliver products or services their customers need. Bloomberg LP provides information that its customers find indispensible. Bloomberg terminals have been described as “the lifeblood of Wall Street trading shops, particularly those that mine their endless reams of data in making daily trading decisions.” Wall Street firms spend about $20,000 a year to rent each terminal, and the company has hundreds of thousands of users who seem to feel the steep price is a worthwhile investment.
Bloomberg does collect data to determine how their customers use the terminals. They are able to track when customers use the terminals and which functions the customers use. This could be valuable information for the company since it helps them develop strategies to ensure terminal availability and create new functions that will help their users.
Customer Data Must Be Protected
Information about customers can be used to create new products and services that those customers will find useful. Bloomberg also allowed their news service reporters to access the information to develop leads for stories that no one else could develop. In this way, Bloomberg leveraged customer data to enhance the abilities of their related news service.
Customers were unhappy to learn that the data was being used by reporters and concerned about the security of their data. Bloomberg is in a unique position and Wall Street firms may not have the option to switch service providers since there is no one else with Bloomberg’s capabilities. Small businesses can learn from this episode that collecting and analyzing customer data could help them create new services, but that data must be safeguarded and never used for any other purpose.