The following article was originally published in Loyalty360 here and was updated in January 2021.
By Susan Frech, CEO and Co-Founder
Entering a new decade is often a time to reflect on the preceding one and to brand them as “eras.” I believe the 2010s will be remembered as the wild, wild, west of data collection. In that new frontier of data, consumers were relatively unaware and free with their information and companies were all too happy to take it.
Now in many ways, it was a win-win scenario for all parties. Limitless data collection led to innovative digital business practices. Consumers benefited from receiving more relevant messaging and marketers could enjoy better targeting, higher conversion, and more reliable measurement. Not to mention the benefits to the explosion of ad tech providers. However, unchecked data collection has led to a flurry of privacy, security, and transparency concerns. It’s safe to say, we’re entering the hangover phase.
In January 2020, Google announced its plan to phase out support for third-party cookies in Chrome within the next two years. Apple’s Safari, which represents nearly 52 percent of mobile share, has already implemented similar measures to prevent tracking users all over the web. And Apple’s impending IDFA changes, which will prompt users to allow or block the data that apps collect on them, continues the march toward restricted access to data for brands.
Consumers have become well-informed about the uses of their data and are increasingly demanding control and transparency, leading to legislation like the California Consumer Protection Act (CCPA) and the General Data Protection Regulation (GDPR) abroad. Marketers need to be prepared to face a world where they won’t have the firehose of third-party data made available to them.
Consumers support data privacy regulation, but they also demand that companies deliver personalized experiences. Because of this, brands need to evolve their data strategy from relying heavily on third-party data to focusing on zero- and first-party data and to do so without disrupting consumer experiences. Here are three tactics we recommend.
Build a Zero-Party Data “World” for Your Brand
Marketers are used to dealing with “Walled Gardens” when interacting with juggernauts like Google, Amazon or Facebook. This moment in time presents an opportunity for brands to build not just their own version of a walled garden, but a world unto themselves for data collection. Zero-party data is one of the most prized data sets for marketers. It is given by a consumer directly, and it usually relates to more high-order attributes like values, lifestyle, and preferences.
Consumers don’t automatically give up their data to brands. Something like a zero-party email campaign doesn’t work, nor does traditional website data collection. And don’t even think about a zero-party advertising campaign. Brands must build a living and breathing, consumer-facing world for zero-party data to be collected and acted upon. Marketers must invigorate loyal customer communities and encourage social interaction. An online brand community, integrated into the marketing strategy, is a powerful way to connect data to the bigger picture and encourage consumers to be a part of something they believe in.
Create a Positive Value Exchange for Data
There must be a clear and concise value exchange between the data given and the experience received. When done right, personalized messages can drive real revenue. Research from McKinsey found that personalization can deliver five to eight times the ROI on marketing spend and can lift sales by 10% or more. It is worth the investment to connect with consumers.
Data must be collected with intention and marketers should plan strategically for how each solicitation should be used to enhance the consumer experience, not the marketer’s PowerPoint deck for management. Consumers will also appreciate when you bring them along for the ride. Is a consumer sharing their geographic location? Make sure to send them localized experiences. Is a consumer letting you know they have children? Offer experiences that fit into a parent’s life. This also applies beyond personal profile information and extends to their thoughts, opinions, and actions. Are you soliciting their feedback about the brand? Make sure to follow up with them about how their opinion mattered in shaping a new initiative.
Create a Mission Statement on Data Collection
Research shows that 79% of consumers will leave a brand if their personal data is used without their knowledge. The typical consumer has likely been blind to the fact that turning on cookies meant they were agreeing to share their information with not just the site they were browsing, but potentially hundreds of partners. Consumers want to know not just the who, what, where and how of data collection, but they will increasingly want to understand the “why.” Why does your brand believe data is helpful? How does it rhyme with your brand story and your unique value proposition? Data is an undeniable part of our lives now. Take a stand on how your brand believes data plays a role.
For many marketers, Google’s news was looked upon with doom and gloom. I urge brands to embrace this evolution as a positive instead. Consumers today realize that their data has incredible value and therefore they will be more selective with whom they choose to share it. Marketers should no longer view data as a passive activity happening in the background, but as an active expression that a consumer knows and trusts you. Ultimately, data can be viewed as a currency of trust which leads to lasting loyalty.
Interested in more?
Check out this infographic to understand how online communities can generate consumer engagement and critical zero-party data for your brand.