This piece originally appeared as a Forbes post.
It is now common to tout the importance of collecting zero-party data. This information, which consumers knowingly and proactively provide brands in exchange for value, powers privacy-safe marketing strategies and is generally more accurate than probabilistic, often cobbled-together third-party datasets.
But how do brands and retailers that have acquired this much-vaunted asset maximize its value? How can organizations transform zero-party data into stronger customer engagement and customer acquisition?
Brands and retailers can maximize the value of zero-party data by crafting creative loyalty programs that boost retention and engagement, offering exclusive deals that accelerate the velocity of key products, and leveraging customer intelligence to expand the brand’s reach to new audiences.
Craft Creative Loyalty Programs
When customers provide zero-party data, they are offering brands and retailers personal information in exchange for some type of value. So, the most creative and targeted uses of zero-party data are those that offer value based on the specific information customers provide. And loyalty programs provide a natural opportunity for brands and retailers to do just that.
For example, let’s say an athletic apparel retailer surveys customers about what sports they play or what kind of fitness activities they participate in. The retailer can then send not just promotions for attire related to that sport but sport-specific content. The retailer might even partner with local events providers who organize, say, intramural sports leagues to alert the customer to opportunities to get more involved in their interests—and, of course, wear the attire of their favorite fitness retailer.
These are creative uses of granular customer data that show the customer that the retailer cares about their experience. It also helps the retailer create a community of avid fans among its customers.
Of course, the retailer can use the data for other targeted marketing campaigns, like personalized ads and product recommendations. For example, the retailer might send an email to a tennis fan advertising tennis shoes during the French Open or Wimbledon.
Offer Exclusive Deals
Another use case for zero-party data is targeted deals. Brands and retailers are accustomed to using basic facts about consumers such as their gender or zip code to target ads and promotions. But historically, these targeted promotions have often been based on aggregated third-party data sold by brokers that were often inaccurate or traded without consumer consent.
Zero-party data heralds the opportunity to provide consumers with richer promotions based on information they have willingly provided. The highly consensual, proactive nature of zero-party data means consumers will understand exactly how and why they are getting a targeted promotion, eliminating the potential creepiness factor. Plus, kicking off the personalization process with a conversation means organizations can source more granular and accurate data than that gleaned from covert or third-party observations.
For example, for Memorial Day or Independence Day, an outdoor gear brand might want to honor the subset of its customers who are veterans or active military members. Bass Pro Shops has done just that, offering a 5% discount every day on thousands of items for service members. The retailer can ask customers for their information and use software to verify their service. Once verified, those customers can receive targeted promotions, which they will likely appreciate far more than obscure third-party data-driven targeting, as they will know the brand asked for their service status and went out of its way to honor them.
Expand Your Reach to New Audiences
In addition to enriching relationships with current customers, brands and retailers can use zero-party data as an opportunity to acquire new ones. One way to do this is through look-alike targeting. By amassing an inventory of rich, consensual zero-party data, organizations can better understand who their customers are as well as what types of customers like which sorts of messages and products. They can then use that information to court new customers on third-party platforms and publishers.
Another way to use zero-party data to fuel customer acquisition is through retargeting. For example, many brands might get site visitors to provide data in an interactive in-ad survey but fail to get them to make a purchase on their first visit. No matter. With zero-party data, the brand is equipped to go back to that customer, whether on a new visit to the site, via email or on other platforms, offering a product or experience based on their interests and who they are.
The main imperative for brands hoping to maximize the value of zero-party data is to get creative with the information customers provide. Customers are complex individuals with rich, varied stories. Finding the place where you can start a dialogue with them, just like a great salesperson would in a store, is a step toward providing the customer with what they want from your organization.