The art of negotiation for the new asset class

The art of negotiation for the new asset class
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Personal data has considerable value and people are starting to recognise it.  That’s because wherever they go and whatever they do it seems that there are people asking them for that data. From multiple questions when we make even the simplest of requests, to the cookies that are loaded onto our browsers as we surf the net, to the repeated requests to provide feedback and complete surveys, every organisation seems to be demanding more and more of our data. That’s a pretty big clue that this stuff is valuable.  The World Economic Forum agrees, and has described personal data as “the new asset class”, identifying it as potentially as valuable as cash, property, stocks and shares, or commodities such as gold, oil and grain.

Sometimes we are willing to let other people use our most valuable possessions and sometimes we are even willing to give them away. But when we do, we normally expect to receive something of roughly equivalent value in return. If we lend something, then we expect either some kind of rental payment, or that sooner or later, the person would reciprocate that loan by themselves lending us something, or by returning some kind of favour of equivalent value. And if we give it to them then again we would expect to either receive payment (it’s what we call selling) or that they would give us something else in return (bartering), or that sooner or later they will give us something of equivalent value. This principle of reciprocity is a powerful and pervasive feature of human relationships. Relationships where such exchanges are equitable are the ones that survive, and prosper and grow stronger. Interestingly, the stronger and longer established the relationship, the more approximate the equality of the exchange can be, the greater the gap between the two parts of the exchange can be, and the more unspoken the terms of the agreement need to be. When the exchange is between strangers, the deal has to be equitable there and then, the exchange is likely to be simultaneous, and the nature of the exchange will need to be made completely explicit.

If we apply these principles to the use of personal data, we can expect that as people become aware that their personal data is valuable then they will expect and demand that in exchange for letting companies use their data they will be given something in exchange, and they will want that exchange to be a fair reflection of its value. And that’s precisely where there is a need for negotiation to take place, so that the data seller and the data buyer can work out a mutually acceptable basis on which the provider will allow their data to be used by the company who want to use it.

Negotiation is a particular method for resolving conflict. It is needed where there is a problem and different people have different solutions to that problem. For example, when dealing with a company on the Internet they want me to give them my personal data for nothing, for ever, and to agree that they can do anything they want with it. And they want as much of my personal data as they think they can get from me. On the other hand, I only want to give them the specific information they need in order to give me good customer service. And I don’t want them to use that data for anything but understanding my needs as a customer. I certainly don’t want them to sell it to an unknown third party, and in exchange I want them to give me something worthwhile, such as a better customer experience and possibly a discount on the advertised price.

These two starting positions are mutually incompatible and on the face of it neither of us will get anything, we simply can’t do business with one another. Negotiation gives us a way of developing a solution that is acceptable to both of us, and allows us to do business together, to our mutual benefit.

Negotiation involves a series of offers and counter-offers, in which the two parties spell out what they want, what they are prepared to give in exchange, and in the process, what they don’t want and are not prepared to accept. The essence of effective negotiation is the understanding and acceptance that it involves trading:

“If you give me some of what I want, then I will give you some of what you want”


“If you give a little on that, then I’ll give a little on this”

Negotiation is the process of progressively identifying a package of trades by making a series of proposals, finding out which ones are and aren’t acceptable, and putting these together so that a mutually acceptable exchange can be agreed.

In the context of today’s debates about the use and abuse of personal data it is important to recognise that negotiation is very different to other ways of solving the problem of reconciling two incompatible positions.

A widely used alternative to negotiation is aggression. It can be used in situations where one person is much more powerful than the other. In these situations aggression, which involves forcing your solution on the other person, often looks like a good solution. However, it first of all requires the defeat and surrender of the other party, and then depends on their continued compliance, People don’t like being forced to do things. Psychologists have identified the resultant “reactance” as a powerful motivator which drives rejection, resistance, rebellion and revenge. Aggression is not a good long term strategy.

However, at present, for most users of the internet this is the strategy they will most often be faced with: when they meet the “click here to accept” button they have no choice but to accept the first and only offer being made. There is no way that they can say that they are unhappy with the exchange (or non-exchange) being offered and offer an alternative. At this point they are forced to give in or abandon trying to use that bit of the internet.

Aggression can often be backed up with persuasion (which people often confuse with negotiation). Persuasion depends on the use of information and emotion to change what the other person thinks and feels about what is being proposed. So Google, Facebook and the other internet behemoths that want to collect and use our personal data not only present “take it or leave it” user choices, but are also extremely active in trying to convince us that what they are doing is good for us.

Neither aggression and giving in, nor persuasion produce mutually acceptable equitable exchanges; they simply impose or reconcile us to inequitable exchanges. So if companies want long-term relationships with their users and customers then they need to give those customers the tools they need to negotiate the terms on which they will give them access to their personal data. And if they do that the mutually acceptable exchanges they negotiate will be the basis for long-lasting relationships which will be of benefit to both them and their customers.