Marketers: It’s Time to Offer Customers Real Value if You Want Their Data
As marketers stare at the eventual demise of third-party cookies, they are looking at zero-party data as an alternative. But how do they convince customers that sharing their valuable data is worth it? Here, Jake Weatherly, CEO, SheerID, uncovers three ways marketers can incentivize consumers to share their personal data.
Marketers have been having a debate about just what zero-party data is and whether it differs from first-party data. In fact, there are two kinds of zero-party data: information gathered from public forums like social media platforms or review sites and data that customers or users willingly give brands directly as part of value exchange for products, services, and deals.
I believe information consumers knowingly offer brands in exchange for value is the superior form of zero-party data. This is because it compels brands to solve the problem at the very foundation of the data privacy movement: can they provide enough value to encourage consumers to share their personal information?
But just how do brands convince customers that sharing their valuable data is worth it?
Three ways brands can incentivize consumers to share zero-party data are by using it to provide rich customer experiences, exclusive deals, and helpful product recommendations. Let us review these three strategies.
Use Zero-Party Data to Enrich Customer Experiences
When marketers and consumers think of the drawbacks of data-driven marketing, they typically think of retargeted product promotions following consumers around the internet for a product they have briefly browsed or may have already purchased.
Using data to enrich customer experiences flips the mindset behind relentless retargeting on its head. Instead of using customer data purely to personalize ads and generate value for the advertiser, the brand creates valuable experiences that encourage the customer to share a little bit about themselves, so the brand can personalize marketing and provide more helpful service in the future.
For example, during summer, many parents look for products to entertain and outfit their children during the school break. A bookseller, video game retailer, or beachwear brand might ask online visitors whom they are shopping for to determine if they are parents of school-age children, clearly explaining the value proposition behind providing that information. If the brand wants to offer an exclusive deal in exchange for data on a customer’s status as a parent, professional, educator, or military service member, for example, the brand should use accurate verification methods to ensure responses are truthful.
Once the brand or retailer has earned zero-party data indicating a subset of its customers are, in fact, part of a valuable community such as parents, the company can put on local or virtual events for families to discover and discuss age-appropriate products. This way, the brand is not just collecting data on shopping habits and assuming a customer is a parent; rather, the brand is receiving consensual, verified identity data and offering fun and educational experiences in exchange.
This strategy often mobilizes loyal, evangelical communities to rally around a brand, something that can lead to much greater lifetime value than the traditional use of customer data, such as retargeting. In this scenario, the brand and the consumer both come out on top.
Offer Targeted Deals Based on Customer Identities
A similar strategy to offering experiences based on parenthood might be offering targeted deals based on a customer’s profession.
For example, the pandemic put a major strain on hospital workers, such as nurses. Tales of nurse burnout persist, and it is safe to assume many nurses would appreciate being recognized for their service over the past two years and rewarded with relevant, special promotions.
To that end, a travel company might ask consumers searching for beach vacations to offer information about their profession. The company could explain that it has deals related to specific professions, and if a customer provided verifiable information indicating they are a nurse, the travel company, be it a hotel brand, airline, or vacation marketplace, could offer a discounted trip or VIP experience to thank nurses for their service.
Of course, nurses are just one example. The brand could replicate this tactic across other identity-based communities. What is important is that, as in the experience strategy, the brand is providing real, targeted value in exchange for a customer’s personal information. The customer is likely to appreciate that value and may even post about it on social media, amplifying the value of the program many times over. For example, according to a Harris Poll survey, 98% of teachers say they would share a teacher discount with others in their profession.
Provide Helpful Product Recommendations
Ultimately, collecting zero-party data is the first step toward providing a highly curated, concierge-like brand experience that does not just incentivize targeted sales but transforms the brand into a guide of sorts that actively offers helpful information to improve customers’ lives.
Of course, the first level of this sort of value exchange is exemplified by entertainment providers like Disney. They use information about a customer’s preferences to recommend future experiences that delight them and create lasting memories.
But one can imagine an even deeper value exchange. For example, a retailer like Petco might ask visitors to its site what pets they have, whether they are first-time pet owners, how old the pets are, and so on. Petco could then proactively recommend items a first-time dog owner might not know they needed. Alternatively, it can provide content like a medical checklist that does not lead to a direct sale but establishes a valuable and trusting long-term relationship between the retailer and their customer.
Whether brands offer unique experiences, deals, or recommendations in exchange for zero-party data, the imperative is the same: when you provide deep, memorable, and transparent value in return for data, your customers will not view providing personal information as invasive. Rather your customers will enjoy this first step in their long-term, mutually rewarding relationship with your brand.
That value exchange—and not merely replacing old identifiers like third-party cookies with new identifiers—is what marketing’s embrace of data privacy is really about.