The original version of this piece appeared as a Martech post.
The future of data collection requires marketers to think differently. For years, the standard in marketing has been to collect as much data as possible, mostly covertly, and figure out how to use it to drive value later. Now, with new anti-tracking measures by Google and Apple plus fresh regulations, marketers will need to figure out how to encourage customers to proactively share data by making a value proposition upfront.
The key mindset shift for marketers is to stop thinking about collecting data at all costs to drive transactions and to focus instead on providing long-term value. Marketers must persuade customers with a clear value exchange: their personal information in exchange for a better user experience, better product or a better offer.
Three guidelines for marketers as they build future-proof data-driven strategies are to add value, not just collect data; make data collection a conversation; and focus on long-term relationships rather than one-time transactions.
Here’s How Marketers Can Put Those Three Principles into Practice:
01 Add Value Instead of Just Collecting Data
It is easy to encourage marketers to provide value to customers to earn their data. But what does providing that value look like in practice?
Offering incentives for information—such as demographics, communications preferences, or product interests—is the first step in reframing data collection as a two-way exchange between customer and brand that adds value for all participants. Why? Because value-centric marketing uses this very information to provide value back to the customer.
For example, the sustainability-focused shoe brand, Rothy’s, offers discounts for teachers, first responders, and medical professionals. Including an option on their checkout page to verify professional information in exchange for 20% off a purchase is an effective way to flesh out the brand’s customer profession demographics while providing targeted value to the customer.
Exclusive offers like this are a more powerful way to recognize customers as individuals than a generic discount open to all. Instead of casting the widest net possible, marketers should determine what data they can collect to drive creative and memorable customer experiences and ask the customer for that information upfront. That way, the customer gets an offer based on their individual characteristics, and they understand exactly why a business wants to collect their information.
02 Make Data Collection a Conversation
Brands can effectively collect the data to drive exclusive deals by adopting a conversational mindset, which means being transparent about data collection and helping the customer understand the value of data sharing. It’s also a valuable strategy for maximizing the value of zero-party data and consent-driven personalization at all stages of the customer life cycle.
Many brands are familiar with the benefits of zero-party data in a post-acquisition context: leveraging preferences or user data to boost retention and engagement through loyalty programs, well-timed offers, and personalized recommendations. But marketers often overlook the potential of zero-party data to make connections with prospects as early as their first visit when they’re still in the consideration phase. Opening the conversation at that stage can show the customer the business cares and kick-start a long-term, two-way relationship.
One way to approach this is considering the specific scenarios, life stages, and communities that lead individuals to your product and engaging them on that basis. Continuing with the Rothy’s scenario: marketers might seasonally push targeted discounts, adding prompts to the site’s homepage that lead with their special offers for, say, teachers in the weeks leading up to the new school year. Opening with an offer might not lead to an immediate conversion. But it could start a conversation that allows the marketer to provide differentiated value and drive a conversion later.
03 Focus on Long-Term Relationships
The insights zero-party data offers can help drive conversions. But the strategic value of collecting consensual, quality information about customers goes far beyond the short-term sale.
Petco provides one example of the value of shifting the strategic use of data towards a long-term, relationships-oriented perspective. Zero- and first-party data have been central to the brand’s strategic shift from a traditional retailer to an experience-centered animal care provider. Petco has used this data to offer personalized attention closer to the standard in human healthcare.
Petco’s mobile app is the anchor for a two-pronged strategy focused on personalized messaging and predictive care, according to a 2021 report by The CMO Club. App and purchase data do not just guide recommendations and targeted ads. They allow Petco to provide informed and predictive resources to support the health and well-being of pets — with the goal of eventually moving toward diagnostics.
Here, the ability to collect accurate personal data optimizes for future sales, but it’s also the engine for improved care and, with it, a trusting, sustained relationship between customer and brand.
Ultimately, if leveraged successfully, zero-party data is an investment in a relationship that has growth potential and long-term value. Brands and marketers that approach customer data as the soil in which to nurture a future relationship—not just the next sale—stand to gain valuable insights that make the customer feel especially well cared for in both the short and long term.