Instead of Spying on Customers, Talk to Them Instead
On the heels of policy changes from Apple and an increasingly hands-on approach from regulators, more consumers are taking back control over how their personal data is collected and utilized. Not only do consumers have more tools to restrict access to their digital footprint, but they're also using those tools to shape the consumer experience and transform data-based marketing.
According to Marigold's 2023 Global Consumer Trends Index, incognito browsing rose 55 percent year-over-year, and ad-blocking tech use increased by 22 percent. Moreover, a mere 4 percent of Apple users are opting in to allow app tracking for advertisers, and the number is only expected to dwindle. To put it simply, consumers are shouting, "This is my data. You can't have it."
Unless, of course, they decide to give it freely.
It's time to replace outdated approaches with what's called zero-party data — which is data consumers provide to companies directly and knowingly, usually in return for something like personalized recommendations, access to discounts, entertaining interactions, or other benefits. It replaces cookies with conversation and transactions with trusted relationships.
Done right, zero-party data can be one of the most powerful tools for a marketer. With zero-party data, consumers tell you what they intend to buy, where they'll buy, and even how much they plan to spend. These conversations leverage mechanics such as questionnaires, polls, quizzes, contests, and social stories to engage with and entertain consumers. Add in rewards, and you give consumers enjoyable reasons to share their data, as well as a payoff that makes it worth their while to provide crucial information about their behaviors.
This relationship creates a value-exchange and is so much more powerful than more traditional, cookie-driven targeting by allowing consumers to share their information directly.
Consumer expectations have shifted quickly in recent years, putting immense emphasis on personalization and meaningful relationships. Two-thirds of consumers are interested in receiving discounts from a loyalty program and 58 percent desire a points-based program. Just under one-third want exclusive or early-access while a near-quarter of consumers are hungry for personalized product recommendations, all according to the same 2023 Consumer Trends Index report.
Let's be clear, consumers still want to hear from brands. But what most consumers really want is a true exchange of value, not a data shakedown. That means brands can't just take data without asking, and they can't sell it anywhere they like. They need to deal directly with consumers, offering value for that data. In addition to asking for a consumer's data and providing value in return, brands also must show they will keep data safe and private. About three in four consumers say they want brands to use their data responsibly and to treat them as individuals.
Marketers have a crucial role in understanding how to talk about those shifts, both internally and externally. They can ensure that clients and companies adhere to privacy regulations, consumer expectations, and platform limitations.
For companies who take this seriously, the payoff in brand loyalty can be huge. The fastest growing factors feeding brand loyalty include "understand customers as individuals" (up 11 percent year over year), "treat data with respect" (up 11 percent), and "surprise with rewards" (up 13 percent). What's more, 59 percent of consumers say they would pay more to buy from a preferred brand that meets these preferences.
Our research also suggests that, too often, personalization is more a marketing buzzword than an operating philosophy. Half of consumers report feeling irked by irrelevant offers (49 percent), 42 percent say they've received messages that don't reflect their needs, and almost a third (32 percent) do not feel a brand recognized their loyalty history.
True personalization, powered by zero-party data, offers a different path that provides a sturdy foundation for a long-term relationship. Brands can meet consumers' expectations of better content, offers and product recommendations. And consumers will reward that effort with loyalty:
- 82 percent of consumers have a favorite brand that rewards their loyalty
- 69 percent are content when brands message them with relevant VIP offers
- 77 percent would accept more messaging, or receive the right amount, on loyalty programs
The trends are clear. Marketers must help their clients and organizations navigate the changing world of data privacy and zero-party data. As well, as privacy legislation ramps up around the globe, shifting marketing away from cookies and to relationship marketing, marketers must adapt.
It's time to meet consumers where they are, by talking to those consumers directly and honestly. They'll repay you in spades, with loyalty, engagement, and data to drive personalization.
The views and opinions expressed are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.
Megan Fletcher is VP of customer marketing at Marigold. Marigold, a global SaaS firm, is a leader in digital marketing with deep expertise in key industries to help marketers create unique and highly personalized experiences to build relationships with their customers. Megan is a notorious question-asker and change agent, with a passion for building relationships and driving strategy and maximizing execution. Megan brings experience with internal and external communications, program development, customer marketing, and training and development. With a wide range of industry experience, Megan has worked as a Lead Consultant for Organizational Inclusion, Senior Director of Internal Communications, and most recently as VP of Employee Experience at Marigold. Based in Nashville, Megan hails from Chicago, and believes it's the world's best city.