How marketers can turn privacy challenges into personalization opportunities
Using zero-party data that consumers provide willingly not only addresses privacy concerns, it’s more effective marketing as well, says Jamshed Mughal (global head of strategy and services, Marigold) for The Drum's latest Deep Dive into The New Data & Privacy Playbook.
Consumers are taking back control of their online data and identities, empowered by a combination of increasingly sophisticated privacy tools and aggressive privacy regulations.
This has many marketers concerned. But they shouldn’t be. As the proverb says, when one door closes, another opens.
The fact is, doing away with the old ways of tracking customers is actually the right thing to do anyway. We shouldn’t need privacy-related tech or laws to force the issue. Consumers are already telling us what they want.
According to Marigold’s recently published Global Consumer Trends Index 2023, consumers are frustrated. The survey found that 49% of global consumers are annoyed by irrelevant content or offers from brands, 32% are frustrated by messaging that doesn’t recognize their history, 35% are turned off by messaging based on information they haven’t directly shared.
Simply put, consumers have had enough of creepy cookies, tone-deaf communications, and clunky outreach strategies that border on spam. In other words, the very type of activity that these “concerning” privacy laws and tech are designed to limit is the activity marketers should be moving away from anyway.
The correct response to these challenges is to fundamentally change the nature of customer communications for the better. Implementing a truly personalized messaging strategy will not only resolve these privacy-related challenges, it’ll result in better and more effective marketing as well.
For instance, the Consumer Trends Index also tells us that 93% of consumers will trade personal and preference data in return for discounts and coupons. The next best thing is a loyalty rewards program, for which 91% will trade personal information, followed by early/exclusive access to products or services (86%), prize opportunities (83%), community benefits (59%), and useful content (51%).
The problem that needs fixing isn’t the removal of outdated data collection practices. The problem is with the user experience these antiquated practices created. However, the solution to both is the same—personalized messaging.
Marketers should be collecting first- and zero-party data though, among other things, engaging experiences on their owned channels that provide a value exchange and actual value to consumers. They can inform those experiences through omnichannel brand interactions, and then continue collecting customer insights to make those experiences even more relevant in the future.
That means collecting a full spectrum of data. Starting with demographics (name, age, location, gender, occupation, etc.). That’s easy data consumers can just tell you. The rest you have to collect by providing experiences that allow you to examine what they do, not just what they say. This includes behavioral data like purchase usage; engagement activity; lifecycle stage; psychographics like needs, interests, attitudes, values; and sociographics like friend graphs, personal profiles, etc.
This isn’t mere theory. We’ve already seen the impact in real life with several customers who use Marigold Experiences to host engaging value exchanges on their owned channels to collect this all-important zero-party data for themselves.
For instance, Salling Group ran a sweepstakes campaign incorporating gameplay elements. This took the form of an instant win digital experience that involved spinning a virtual roulette wheel for prizes. Some 10,000 customers engaged with the experience daily , which had a conversion rate of 86% and generated over 746,000 entries collected.
Air New Zealand’s “Mystery Break” experience had consumers enter to win the chance to fly to a surprise destination. The effort was designed to both promote the airline, but also New Zealand as a destination in general. The data fields on the signup form allowed the airline to base its segmentation of specific psychographics and identify personal traits that could be used afterwards to drive additional marketing campaigns. It collected over 98,000 points of zero-party data, with a 55% conversion rate.
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And a snack food company teamed up with an airline to give away travel vouchers. To enter, customers had to purchase a promotional pack of snacks, and scan the QR code. Alternatively, they could visit the company’s website and enter a code. Over the course of the 90-day campaign, they issued over 1,000 travel vouchers, or 12 holiday packages a day. The effort collected 2.8 million entries in total, with a 57% conversion rate and 1,500 daily engagements.
Building engaging experiences like these is just the first step. The next is to enrich the data and put it to work for you. This zero-party data is the raw material you use to build rich segments that can be activated throughout the whole customer lifecycle. That supercharges your personalization efforts, and makes it more effective.
That’s the key to delivering personalized messaging and benefits to customers, at scale.
It allows the ability to deliver outcomes to customers that can generate more loyalty & business at the end of the day. It identifies which products are important to which consumer groups. It informs targeting to know who to reach with what offer or message, when, and through what channel.
In short, personalized messaging based on data that consumers provide willingly through valuable and engaging experiences is just plain better marketing. Don’t think of it as a response to changing times. That’s a reactive way of thinking. Think of it as a proactive preparation for the future.
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