How a focus on zero-party data can help businesses move forward
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The COVID-19 pandemic has unsurprisingly led to an increase in online usage as workplace shutdowns have been instituted and people have been forced to seek socializing in new ways. With the skyrocketing of online usage, growing concerns about user privacy have surfaced.
As consumers flocked online, companies collected more and more data. This came to a head, however, in June 2020, when Apple introduced a new privacy information section for product pages on its App Store, which gave customers greater transparency and understanding of data than consumers. apps collect 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 have also adopted varying degrees of consumer privacy laws, with California having passed the most stringent to date, the California Consumer Privacy Act. Utah was the last to pass consumer privacy laws in March, and Connecticut announced it would become the fifth state to join the ranks, along with Virginia and Colorado.
The passage of these changes and consumer privacy laws has marketers wondering what’s next. We know that third-party data and cookies disappear. As a result, marketers have slowly started moving to first and zero-party data. How can brands use these underutilized resources?
First-party data, or consented data that a company collects about its existing customers, comes from loyalty programs, online purchases, and more. The problem, however, is that finding new customers and new data can be a challenge because companies essentially operate in a vacuum. Because they only have data on their existing customer base, there is a lack of new customers they are not reaching.
Zero-party data, on the other hand, provides opportunities and insights 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. This can include preference center data, purchase intent, personal context and how the individual wants the brand to recognize [them].”
It can be a marketer’s most valuable resource because it doesn’t depreciate over time. On the contrary, it evolves. It ultimately provides real sources of truth that are deterministic and verifiable, and it provides real value for building and targeting audiences with the right offers at the right times.
The depth and breadth of consumer insights that zero-party data captures is far greater than that captured by first-party data. Putting it together, however, can be a challenge. How can a company convince consumers to voluntarily give out personal information when they are beginning to protect it so closely?
Gamification, an engaging method of getting users to interact with a platform’s services, can unlock a treasure trove of zero-game data for marketers that might have previously been unavailable. By implementing gamification, businesses can ensure that they stay one step ahead and have a finger on the pulse of their consumers as we approach a cookie-free environment.
With gamification, data can be unlocked through consumer surveys or by encouraging consumers to opt in to tracking activities they do daily like walking, in exchange for some sort of reward. The responses generated from surveys and the tracking information gathered during registration can be invaluable to marketers, especially as companies continue to move away from third-party data and cookies.
Gamification is a simple and scalable solution to solving the challenges faced by marketers as cookies and third-party data collection are phased out. The growth of mobile has made it even easier to reach consumers.
For companies sculpting their data set, providing a fair value exchange to consumers will build 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, thereby advancing their business goals in an ethical manner. Some might call this a “win-win” scenario. At a time when companies are under scrutiny for their lack of data transparency, consumers value these direct data strategies more than ever.
Increase engagement by gamifying
Data gamification can be done in different ways. Some of the more popular methods include, as mentioned above, consumer surveys and tracking, which can help provide information such as health and lifestyle choices, financial well-being, sleep patterns and heart rate.
Other forms of gamification include:
- Online quizzes. Retail and makeup brands are doing this very well, bringing consumers to their websites and encouraging them to take quizzes to figure out which makeup style or tone best suits their personality.
- Sharing receipts for points. Consumers can unlock points and rewards simply by uploading receipts from different physical or e-commerce purchases.
Zero-party data collected from these methodologies is essential for informing customers about relevant products and services. Using gamification to understand your customers’ buying behaviors, revenue, and other financial information allows you to better serve them both internally and through business partners. By enabling consumers to leverage their data “depletion” and voluntarily trade their data for value, brands can create a better and healthier ecosystem where they can collect more types of data in an accurate way. and build greater trust with the consumer. It also helps improve a company’s return on advertising spend (ROAS), which is the true measure of success.
Whether you’re asking consumers to take a survey, track their activity, take a quiz, or play a game, the exchange of consumer value 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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