One Night Stand worth $300 Million

In the ProjectVRM Standards Committee discussions, we’ve talked quite a bit about a “One Night Stand” use case, where a personal data store is used with an online retailer and all personal data is erased–as much as possible–after the transaction.

The premise is simple: if users know they are safe giving personal data, they will give it more freely. Limits on long term data mining (and its attendant offensive behavior of junk mail, spam, and telemarketing) paradoxically increase data sharing and enhance the ability of vendors to provide more meaningful engagement at the moment of the transaction. Less long term data retention leads to more real-time data provided by users, resulting in better customer experiences, and more profit for vendors.

Until recently, this was a theoretical argument, a belief by those of us promoting VRM. As Doc Searls puts it, “A free customer is more valuable than a captive one.”

Now we have evidence of just how valuable that can be.

Jared Spool shares with us the real-world example of a redesign in the direction of the “One Night Stand” that created $300 million in value in the first year: [excerpt edited for brevity. see full article for details]

Now that’s real money.

Hat tip to of iface thoughts.

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2 Responses to One Night Stand worth $300 Million

  1. Firstly this reminded me of a post Ben Laurie wrote about recent research and the possibility of using the Trusted Platform Module found in most modern computers, to create an envelope for handing sensitive data transactions.

    “… using the TPM to hold sensitive data such that the guy holding it can read it – but if he does, then it becomes apparent to the person who gave him the data. Or, the holder can choose to “give the data back” by demonstrably destroying his own ability to read it.”

    This may help alleviate some concerns people have in sharing certain information to be held long-term, and to potentially audit access of ones data (how practical this is, is yet to be seen).

    The other thought concerned how your site and many others required(s) that people either register, fill out forms or other protocols that get in the way of the users goal. While there are two sides to this story, I see inappropriate barriers to entry for users everywhere, it’s sure frustrating.

    I’m a strong advocate of letting users do whatever they like without registering or form filling in order to lower the initial barrier to entry with one or two catches: Requiring just an email address (or other identifier where required) for later verification, with conditions on how it will be used. Such that all actions performed are put in moderation until users have both verified themselves, and administrators have considered them fit for approval. A two-pronged approach with as much automation/outsourcing (e.g. using the user base to moderate) of this process as the situation desires.

    With so much competition online, getting people to simply try something new will only get harder in time, and I believe many will have to go open access and allow minimum disclosure in order to simply get traction. OAuth and OpenID may help this process but I don’t really like either of them due to their centralization, or the Internet’s information-exchange architecture for the same reason… but they’re all we have (for now).

  2. Hi Joe – nice post. I have one of my own linking to it tomorrow. Bart Stevens suggested it might be interesting for us to have a chat. If you think so please drop me a line. I’m a partner at VC firm DFJ Esprit – http://www.dfjesprit.com.
    best,
    Nic

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