Marketing State Farm wants to use customers’ data to find out how safe their dri
ID: 391841 • Letter: M
Question
Marketing
State Farm wants to use customers’ data to find out how safe their driving is by letting drivers install a small device in their vehicle that monitors, records, and analyzes all of their driving habits. By utilizing the State Farm program of tracking “Big Data” in their “Drive Safe & Save” program, some drivers believe that this may lead to discounts for their insurance plans. Other customers believe that tracking this information will lead to government infiltration of their lives and loss of privacy.
What are your feelings about these programs? How will State Farm’s program stand out among the competition? What might happen with customer data? How will State Farm use this data to lead to the best prices for customers while growing profits?
After you have read through the entire case study, post your responses to each of the questions below. For your answer to the third question, you should include a full discussion of at least two possible alternatives. For your response to the fourth and fifth question, respond as if you are the marketing manager of this company.
What is the decision facing State Farm?
What factors are important in understanding this decision situation?
What are the possible alternatives? Fully describe at least two.
Pretend you are the marketing manager at State Farm. What decision(s) do you recommend?
What are some ways to implement your recommendation?
Explanation / Answer
Objective:
Statefarm wants to install device to collect data about the driving patern of drivers to improve the performance of the drivers, utilise the big data to perform meanining analytical insights to improve company's efficiency
Concerns from Customers:
Customer are more concerned about the data privacy. Expectation from Statefarm is to ensure customer data are stored and managed appropriately to ensure privacy
How to leverage the Big data:
State farm can leverage the big data collected from the devices for following
1. Use the data to evaluate the drivers behaviour, driving pattern and based on the same ratings and bonuses can defined to drivers
2. Training requirements can be evaluated based on the history driving patterns of driver and suitable trainings can be imparted
3. Company can analyse the customer behviour, predictive analysis can be used to identify customer usage and plan the demand of vehicle availability
4. Predictive analytics can be used to identiy the servicing requirements of vehicles and arrive at suitable preventive maintenance schedules of vehicles
Possible Alteratives:
1. State Farm can deploy a questioner or survey to collect information from customers with their concent during the trip. They can create an app which can be installed in each vehicle. This will help to them to collect necessary data whch could be used for further analytics
2. State farm can exclude customer information and use rest of drive related analytics and vehicle performance related data which can avoid concerns from custo,ers. This will suitably improve vehicle uptime, driver utilistaion, safety and quality of service
Conclusion:
I would recommend STate farm to continue with the installation of devices to capture all necesary information including the customer, driver and vehicle performance. They need to take additional precautions related to data privacy concerns of customers
Precauions to be taken to manage data privacy issues:
State farm can have suitable software to morph the customer related demographic and privacy informations so that the data theft can be prevented.
They can implement a two layer methodology for storing data where a secure key can be given and each customer to be named with some alternate code wich makes it difficultto coorelate customer name and their informations.