CIOs unwittingly may be the caretakers of their company’s most valuable asset: its data. Unfortunately, most CIOs and their CFO counterparts continue to take their cue about valuing their company’s data from antiquated accounting regulations. Instead, they should have a heads-up and proactive awareness of contemporary market forces, the art-of-the-possible with data, and investor exuberance about data-savvy companies.
Customer Data Cushions Emergency Landings
Recently, with their businesses stricken by the Covid-19 pandemic, both United Airlines and American Airlines have secured multi-billion dollar loans by collateralizing their MileagePlus and AAdvantage customer loyalty programs, respectively. The third-party appraisals of their data suggest that it is worth two to three times more than the market value of the companies themselves. United’s customer data was valued at $20 billion while its market cap at the time was about $9 billion. Similarly, American’s data was valued at a minimum of $19.5 billion and up to a jaw-dropping $31.5 billion, whereas its own market cap was hovering at less than $8 billion.
In previous years as investors clawed for scraps at Sports Authority’s and Radio Shack’s “going out of business” sales, the highest bidders were not interested in their inventories of jockstraps and joysticks, but rather in their customer data. And in Caesar Entertainment Operating Corp’s bankruptcy proceedings, creditors cashed in its Total Rewards customer loyalty database for over $1 billion—more than any other Caesars property.