How a focus on zero-party data can help companies get ahead
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The COVID-19 pandemic unsurprisingly led to a surge in online usage, as lockdowns were instated workplaces shut down and people were forced to seek socialization in new ways. With the surge in online usage came growing concerns for user privacy.
As consumers flocked online, companies collected more and more data. It came to a head, though, in June 2020 when Apple introduced a new privacy information section for product pages on its App Store that gave customers greater transparency and understanding about what data apps are collecting about them. Since then, Big Tech has continued to introduce privacy rules designed to protect consumer data from third-party data sharing and cookies.
States, too, have passed varying degrees of consumer privacy laws, with California passing the strictest one to date, the California Consumer Privacy Act. Utah was the most recent to pass consumer privacy laws in March, and Connecticut announced that it will become the fifth state to join the ranks, along with Virginia and Colorado.
The passage of these consumer privacy changes and laws has marketers wondering what’s next. We know third-party data and cookies are going away. As a result, marketers have slowly started shifting to first and zero-party data. How can brands use these underutilized resources?
First-party data, or consented data that a company collects on their existing customers, comes through loyalty programs, online purchases, and more. The problem, though, is that finding new customers and new data can be a challenge, as companies are essentially operating in a vacuum. Because they only have data on their existing customer base, there is a gap in new customers they’re not reaching.
Zero-party data, on the other hand, offers opportunities and information that first-party data simply cannot provide. Coined by Forrester Research in 2018, zero-party data is defined as data that “a customer intentionally and proactively shares with a brand. It can include preference center data, purchase intentions, personal context, and how the individual wants the brand to recognize [them].”
It can be a marketer’s most valuable resource because it does not deprecate over time. Rather, it evolves. It ultimately provides real sources of truth that are deterministic and verifiable, and it provides true value to build and target audiences with the right offers at the right moments.
The depth and breadth of consumer information that zero-party data captures are significantly more than that which is captured through first-party data. Gathering it, though, can be a challenge. How can a company convince consumers to willingly give up personal information when they’re beginning to guard it so closely?
Gamification, an engaging method that entices users to interact with a platform’s services, can unlock a treasure trove of zero-party data for marketers that might have been previously unavailable. By implementing gamification, businesses can ensure that they’re staying ahead of the curve and have a finger on the pulse of their consumers as we approach a cookieless environment.
With gamification, data can be unlocked through consumer surveys or by encouraging consumers to opt into tracking activities they do daily like walking, in exchange for some sort of reward. Responses generated from surveys and tracking information gleaned from opting-in can be invaluable to marketers, especially as businesses continue to move away from third-party data and cookies.
Gamification is a simple and scalable solution for solving the challenges facing marketers as cookies and third-party data collection are phased out. Mobile growth has made it even easier to reach consumers as well.
For businesses sculpting their dataset, providing a fair value exchange for consumers will bolster the trust and transparency with the company, and encourage users to share more important data. This, in turn, allows businesses to better leverage consented personal data in their marketing tactics, further advancing their business objectives in an ethical way. Some might call this a “win-win” scenario. In an age where businesses have been held under scrutiny for lacking data transparency, consumers value these direct data strategies now more than ever.
Deepen engagement by gamifying
Data gamification can be done in different ways. Some of the most popular methods include, as mentioned above, consumer surveys and tracking, which can help provide information such as health and lifestyle choices, financial wellness, sleep habits and heart rate.
Other forms of gamification include:
- Online quizzes. Retail and makeup brands do this very well, bringing consumers onto their websites and encouraging them to take quizzes to understand which style or makeup tone best suits their personality.
- Sharing receipts for points. Consumers can unlock points and rewards simply by uploading receipts from different brick-and-mortar or ecommerce purchases.
The zero-party data collected from these methodologies are essential for informing customers about relevant products and services. Using gamification to understand your customers’ buying behaviors, income, and other financial information helps to better serve them both internally and through business partners. By allowing consumers to get value out of their data “exhaust” and willingly trade their data for value, brands can create a better and healthier ecosystem where they can collect more data types in a way that is accurate and build greater trust with the consumer. It also helps improve a company’s return on ad spend (ROAS), which is the true measurement of success.
Whether you’re asking consumers to respond to a survey, track their activities, take a quiz, or play a game, the value exchange for consumers is what will drive information sharing. Ultimately, companies that can develop the right tools to access zero-party data will be the big winners in the new era of consumer privacy.
Brian Mandelbaum is the CEO of Klover.
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