Note: This article is part of a two-part series on zero-party data. Read part one on what zero-party data is and how it improves the customer experience, then dive into part two for examples of how it can be incorporated into each stage of the customer life cycle.
To build the personalization customers expect and crave in their brand experiences, organizations require trustworthy data to inform their strategies. As the use of third-party website cookies is being phased out (and with increasing customer concerns about privacy), it’s getting harder to collect the data that marketers need. Plus, it’s increasingly difficult to rely on first-party data alone to create the unique offers and experiences customers are demanding.
That’s why zero-party data is important. It can be used at key touchpoints in the customer life cycle to learn more about your customers’ wants and boost the value of your brand’s offerings.
Because zero-party data is voluntarily given and comes directly from the source, it’s more reliable than data collected other ways. Many of today’s customers are skeptical to share their personal information due to privacy concerns, but they will give their data and preferences in exchange for something of value. For savvy customers, this often takes the form of interactive digital experiences, including giveaways, instant-wins and other gamification options.
Zero-party data collection uncovers the customer details you need to build meaningful experiences—without ever feeling intrusive to your customers. If your organization can create an engaging process for zero-party data collection, you can build trust and engagement that will carry through the customer’s entire life cycle.
Optimize Your Zero-Party Data Strategy to Add Value for Customers
Zero-party data presents new and exciting opportunities to know your customers. To maximize impact, optimize your organization’s zero-party data strategy so you offer the right value at the right times in the customer life cycle. If you offer desired value, customers will voluntarily tell you what products they want, what they look for in a service and what offers might motivate them to make a purchase.
According to Forrester, the customer life cycle is a “customers’ relationship with a brand as they continue to discover new needs, explore their options, make purchases and engage with the product or service experience.” As customers move through the cycle, their preferences and needs will change—zero-party data can help you keep up with these changes and tailor the experience so you can offer the right advice, product or service at the right time.
How do you collect zero-party data and incorporate it into key touchpoints of the life cycle? Let’s look at some examples, stage by stage.
Zero-Party Data Examples in the Customer Life Cycle
1. Discover Stage
At the beginning of the cycle, customers are realizing they have a problem they need to solve and uncovering options. Use first-party data (data gathered based on past actions) to build a dynamic ad that provides product recommendations based on consumer needs. The ad can ask questions about what problem the customer is trying to solve, and their answer provides zero-party data about their preferences. It makes the decision easier for customers while speeding up the buying process.
Example: A sneaker company runs a dynamic ad asking, “What kind of shoe are you looking for?” If the customer selects running shoes, they ask follow-up questions to narrow the options. The answers tailor what recommended products the customer sees on the site.
2. Explore Stage
When customers are exploring their options, they need pertinent information to feel like they’re making a good decision. Since customers are looking at many options, product recommendation quizzes really shine in this stage. Helping customers narrow down products to the one that best meets their needs (while also providing you with data about their preferences on the backend) makes your brand reliable and easy to work with—you can prove you understand them.
Example: A bank developed a “Which account is best for you?” quiz to help customers find the service that best fit their needs. The quiz answers provided the bank reliable zero-party data about their customers they might not get elsewhere, and the customer left feeling like they picked the right account. At ITA Group, we’ve taken a similar approach with our Customer Experience Solution Quiz. It determines what type of customer solution program will work best with each brand.
3. Buy Stage
The customer is ready to make a purchase, starting a longer relationship with the brand. Offer an incentive to create an account, not just leave after the initial purchase. The incentive could be something simple but convenient, such as free shipping. Seize the opportunity to get to know your new customer with a few get-to-know you questions as they set up their username and password.
Example: ITA Group operates a long-standing program with a leading mortgage lender. In this program, new and refinance borrowers earn a valuable reward when they close. ITA Group manages the redemption site and fulfillment on behalf of the mortgage lender. When we added additional communication about the award early in the customer life cycle, we saw close rates jump by 30%.
4. Engage Stage
Use your data to help returning customers build relationships with the brand. After the first transaction, send a personalized email thanking customers for the purchase and complementing their experience with recommendations. Or send an explanation of incentives and offers so customers know the many ways they can engage with the brand after they sign up.
Example: A telecom organization had a program targeting existing customers to sign up for an online portal account. These customers were already enjoying the service, but they weren’t utilizing all its elements (creating an online account, signing up for automatic payments, etc.). The organization needed a better strategy to encourage customers, so they turned to ITA Group to improve promotions and increase engagement. With our help, they saw open rates jump more than 70%, which was a great indicator their customers were getting the message about adoption.
5. Participate Stage
Later in the customer’s life cycle, it’s especially important to keep them engaged and returning. Delivering a consistent personalized customer experience keeps engagement levels up. Add entertaining elements that ask customers to pick and choose options, then use the zero-party data you’ve gathered to craft experiences that prove how well you understand that customer. Keep in mind that circumstances can change over time, so it’s important to continuously gather zero-party data on existing customers.
Example: A makeup company asks loyalty program customers to fill in a questionnaire about themselves, including skin tone, hair color and eye color. They incorporate answers into project recommendations (e.g., “Here are eye shadows that emphasize your ‘green eyes.’), encouraging customers to answer more questions to see what new recommendations they get.
6. Actualize Stage
Remind customers of the value they are getting from being a customer and voluntarily giving up some of their valuable data. Rewards programs are a great way to do this as they allow you to provide up-to-date, relevant information and send appropriate nudges for less active customers.
Example: A sports bar built a rewards program that focuses on customers’ sports preferences. When customers sign up, they’re asked to list their favorite sports and teams. That zero-party data is used to send reminders of when the favorite teams are playing and that they’ll be on the restaurant TV. Fans get the added value of knowing their important game will be on when they get there.
7. Advocate Stage
Continually improve the customer experience by asking for input on how to improve the relationship and asking for referrals of similar clients. This is a form of zero-party data as well. Asking for customer insights during product development, for example, can be a powerful engagement tool—customers will feel your brand values their insights and will be curious to interact with the final product.
Example: ITA Group referral programs have driven more than $1 billion in incremental revenue for our clients. By formalizing a referral program, you capture more first-party data, increase the likelihood that a lead will close and build incremental value with the referring (and referred) customer. Referral programs are also a great way for brands to monetize NPS surveys by inviting promoters to immediately be a referral partner.
Zero-Party Data Is Important for Improving Customer Advocacy
Zero-party data is a powerful tool for personalizing the customer experience and supporting the growth of emotional connections to the brand. In an era where many customers are wary of sharing their personal data with organizations, zero-party data is an authentic way to gain the information you need without sacrificing customers’ trust. There is so much more it can do beyond the examples given here, and ITA Group is excited to help brands maximize their potential.
Ready to get started incorporating zero-party data into your own customer experience strategy? Request a demo today or chat with one of our experts to learn how ITA Group Customer Engagement Solutions can help you collect zero-party data and build better relationships throughout the customer life cycle.