Scaling zero-party (0P) and first-party data (1P) strategies is becoming a coveted tactic for improving customer experience. But connecting with customers comes with one major challenge – they must be willing to share their personal data with you.
Privacy regulations are putting consumers in control over how they want to communicate with brands, including what information they are willing to share – and consumers are listening. According to a recent global consumer study from Treasure Data, around 41 percent of U.S. consumers actively try to withhold personal data from brands. Other consumers opt to obscure their personal information, either by using alternate email addresses (34%) or providing false data about themselves entirely (23%).
So, where’s the disconnect? It could be a matter of trust. McKinsey found that only 33 percent of consumers think companies are using their data responsibly. Addressing this breakdown in trust is critical for brands.
While considering how to use zero-party and first-party data, think about the following ways you can show your customers how sharing their data with you improves their experiences, builds relationships, and strengthens the data value exchange.
Clearly Communicate How You Collect and Manage Personal Data
The first step is to provide full transparency on how customer data is used and managed. Privacy policies on websites and mobile applications are vital to delivering this transparency. These policies outline what data needs to be collected, and why. They also need to explain how the consumer can request the list of data collected so they can see what they have agreed to.
A consent management system allows organizations to manage consumer preferences on data collection, and integrate it into the customer journey. Consent management reinforces a company’s commitment to transparency and helps build consumer trust. It can also ensure that the company future-proofs itself for new and changing privacy regulations.
Build Trust Through Relevancy
A consent-based approach to customer data strategy allows companies to be strategic about their products and services. Access to rich customer data, including past purchases, email engagement, and website activity, enables improved messaging and reduced ad spend. By allowing customers to set their communication preferences, they are telling companies exactly how to engage with them, increasing the brand’s opportunity to reach and convert customers.
For the customer, it means more relevant communications. They are in control of what messages they receive and when. And, they trust a company to only deliver content and offers that match what they want to see.
Make Customers Part of the Process By Asking for Feedback
Direct engagement with consumers allows them to become a part of the process. The best way to engage customers is to ask for feedback. Customers want to know that their opinions matter and that when asked for them, companies actually listen and use them to improve the customer experience.
When you ask for feedback, whether by survey, phone call, or feedback form, you are showing your customers that you value them for more than just their money. Use feedback to improve products and services, marketing campaigns, customer support, and success strategies.
Tap into Customer Service Conversations
A 2022 Gartner survey found that 71 percent of B2C, and 86 percent of B2B, customers expect customer service to know their personal information during an interaction. What if you could offer this level of understanding during a support call and then listen intently to understand the customer’s challenges?
Customer service is a gold mine of information you can use to improve products and services, and identify improvements or shortfalls in the customer journey. A customer data platform (CDP) equipped with the ability to integrate with customer service tools can help bring this data into a complete customer profile.
Integrate Data Privacy Into Your Brand Values
Like sharing your privacy practices, consumers care about brand values and want to work with brands who share the same values. An Amazon survey found that 81 percent of consumers are more likely to purchase products and services from a brand that aligns with their values.
If consumers will purchase from a brand that shares their values, they’ll also trust that brand and be more willing to share their personal information. Remember, though: it’s essential to be authentic and live the values you espoused. Saying one thing and doing something else erodes brand trust and drives customers away.
Make Loyalty Programs Count
Many brands have loyalty programs that allow consumers to provide personal data in exchange for greater personalization, rewards, and other incentives. According to Forrester, 66 percent of companies say that their loyalty program is a top investment priority to help them collect zero-party data.
There are concerns that customers don’t always provide accurate data when they sign up for loyalty programs. To ensure the data is accurate, the brand must use the data captured to provide real value to the customer. White-glove services are one way a brand can use loyalty program data, where in-store salespeople can access customer data from loyalty programs to help them personalize the shopping experience. Another study from Yotpo shows that customers who sign up for loyalty programs are also looking for early access to sales (60.1%), early access to new products (50.8%), and want offers and recommendations tailored to them (38.9%).
When you use the information customers provide in campaigns and programs that meet their expectations, they will want to give you accurate, up-to-date information.
Prove to Customers You Value Their Data
Access to accurate first-party and zero-party data is critical to delivering relevant, personalized experiences. But it can be challenging to get customers to share their data willingly. Trust and transparency are essential to convincing customers that you will keep their data safe and use it appropriately to improve how you deliver products and experiences.
There are many ways you can collect data from your customers. The key is to show them why you are collecting it and how you will use it. Show your customers you value them as true partners and build a customer data strategy that embodies those values.