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Why collecting zero-party data via loyalty programs is more important than a one-off sale
September 22, 2023
By Nick Watson, VP client success, EMEA at Marigold
Do you have transactional friends? Friends who only do something for you if you do something for them.
That’s not really a friend thing to do, is it? Unfortunately, that’s how many companies act with their customers, particularly their best customers enrolled in loyalty programs.
Customer loyalty programs offer brands the opportunity to create a deeper relationship with their customers by making an emotional connection. So don’t just treat it like a sales channel. Use your loyalty program communication as an opportunity to collect valuable zero-party data. This is data that customers provide directly and willingly, not data that is bought or gathered through cookies or other creepy tactics.
Because it's gained through direct customer interaction, zero-party data tells you more about each customer’s passions, interests, and tastes. That's valuable information worth collecting, rather than just focusing on transactional messages like “buy this again and get points” or ‘buy this again and get a discount.”
According to our 2023 Consumer Trends Index, 43% of consumers are more likely to engage in a loyalty program this year than last — an 8% increase since 2022. But they want one that truly rewards them as an individual and goes beyond points-for-prizes or a generic freebie every tenth purchase.
Focus on zero-party data
After all, how do you even know if you’re offering the right product or service? Zero-party data will tell you much more about your customers’ needs and desires than only relying on purchase history. Once collected, you can use the information to encourage customers to buy from a category they’ve not purchased in before, or to add additional products to their order, all based upon relevant preferences or interests.
Better yet, with the right knowledge about your customer, you have the opportunity to surprise and delight with a unique personalized one-time reward that strengthens brand affinity and creates a memorable “wow” moment that can pay dividends far beyond an individual sale.
Think of zero-party data as the secret sauce that allows you to be genuinely personal in how you personalize your communications. This means more than just customizing an email with a unique first name. It’s about getting to know your customers on a personal level.
Sure, sometimes that might be through a transactional value exchange. But not all value exchanges are directly related to a sale. Make it fun by incorporating engaging, brand-led interactive experiences like quizzes, games, and other experiences that engage your customers and allow them to tell you more about who they are and what they seek.
After all, 82% of consumers favor brand messaging that treats them like an individual — an 11% increase since 2022.
Case study: Vans
Look at Vans, which does a fantastic job of doing exactly this. Before they even send an email to a potential customer, they take several steps to make sure they really understand everything there is to know about the tastes and style preferences of their customers. Tactics used include product finder tools, and interactive experiences that let visitors indicate their interests and passions. (Are they bikers? Skaters? Snowboarders?)
Once collected, Vans uses this information to send authentically personalized communications, with access to exclusive events, content, and even limited edition products that all fall in line with each customer’s stated preferences.
There’s no need to be shy. Customers who sign up for a loyalty program have already stated they’re open to sharing information. They want to learn more. They want you to send them information and offers. They want more than just discounts and points. They want to belong. They want community. Think early access to new products, attending launch events, and personalized recommendations.
Loyalty program or fan club?
Treat your loyalty program like a fan club, not just a faster checkout line. The more information you collect, the better you can personalize their experience. That, ultimately, will lead to sales. In this year’s Consumer Trends Index report, we found that 91% of consumers will trade personal and preference data in return for loyalty rewards.
Just remember, collecting the data is one thing. For it to matter, you actually have to listen to it and respond accordingly. Show them you know them, and they will share more. Each subsequent contact with the customer can use (and then collect) more granular zero-party data. Each interaction is an opportunity to flesh out customer profiles, building up that picture so it includes engagement data, purchase data, demographic data, but also psychographic information.
The more complete the customer profile, and the more data points added, the more easily you can find overlapping segments between customers that purchase data alone won’t reveal. This aids not only your outreach targeting, but also helps you make decisions on what channel to make which types of offers, and when.
Zero-party data is the secret sauce to making the most engaging offers to customers, simply by appealing to their stated personal taste, preferences, and interests. Sure we all have sales goals. But the path to those goals requires equal attention, and zero-party data is the map that will get you there.