Time to rethink how much customer data you store
Does the company you work for (or own) retain data on customers? Odds are pretty high that it does, at least in some form (often fairly extensively). It’s often attractive to do so for both marketing and functionality purposes.
But here’s the thing, storing that data is probably a bad business decision. One that could cost your business a huge amount of money and, even worse, potential loss of trust by your most valuable customers.
Just from the IT infrastructure point of view: As your business grows and the amount of data you store on each customer slowly expands (it always does), your cost for storing that data also grows. Rather quickly. Even if your data center is already well equipped, this is a not-insignificant recurring expense (failing drives, energy costs, other equipment needs, etc.).
Not only do you need servers and storage systems for that data, but you need SysAdmins, database admins, and (potentially) programmers to organize the data and keep it safe. The payroll needs alone often quickly outpace the real value of storing extended data on your customers.
Data security concerns
That “keep it safe” part is where the huge potential cost comes in.
How many data breaches have we all read about in the news? It’s been a rather relentless onslaught of hacks and leaks of customer data that often represents severe damage to the bottom line for those companies.
Every year, IBM releases a “Cost of Data Breach” study. Part of what that study shows is the average cost to the company for each breached user record. And the numbers are astronomical.
In 2016, IBM concluded that the average cost per user record was $141.
One hundred and forty one dollars (USD) may not seem like a huge amount — until you take into consideration that the average data breach, in the same year, resulted in more than 24,000 records being compromised.
In other words, on average, a data breach of user information costs more than $3 million to the company that gets hit.
That’s the average. Some are much (much!) larger.
The Equifax Data Breach included records of 143 million Americans. If the cost stays near the per-user average we’re looking at more than $20 billion.
How many customers do you have? How many customers do you expect to have? Start doing some math — not just on the potential liability for that data being breached and exposed, but also the pure cost to store it and keep it secure.
It gets astronomical. In a hurry. Unless you are earning more than $141 dollars from each user record on a regular basis (above and beyond what you would have earned if you had stored less data) — and don’t mind that you’ll likely lose a great deal of business during each breach due to loss of trust — then it simply does not make good mathematical sense to store this much data.