Inequality in the utility of customer data: Implications for data management and usage Academic Article uri icon

abstract

  • Customer data has long been recognized as a critical resource for supporting marketing efforts. With the rapidly increasing investments in the acquisition and the administration of customer data, the concern about cost-effective management of this important resource is growing. In this study, we explore the concept of inequality in the utility of data – the extent to which records in large data sets differ in their business-value contribution. The Lorenz curve and the associated Gini index, powerful tools for analyzing inequality, have been applied to a variety of social and economic disciplines. We adapt these tools for modeling and measuring inequality in the context of managing large customer data sets, and use them for analyzing utility/cost trade-offs and optimizing data management decisions. We demonstrate the application of these tools in the customer relationship management context of managing alumni relations, using large data samples from a real-world system. The results support our argument that understanding and measuring inequality in the utility of data may have important implications for better usage and administration of customer data.

publication date

  • March 1, 2010