The increasing importance of consumer privacy in online marketing has thrown the industry for a loop that people are still looking to recover from. Consumer frustration with poorly targeted online ads, combined with concerns about data sharing, create a major roadblock to tracking consumer buying signals and finding out what people want. Apple’s privacy changes alone resulted in a $10 billion hit to Meta’s bottom line in 2022.
The bigger challenge is just breaking through the noise for consumers without having to pay more and more for online advertising. The pandemic helped bring countless brands online, but it also made it that much harder to keep a customer’s attention. One way to improve targeting and increase loyalty is to offer consumers personalization that really meets their needs.
Ask Questions, Get Answers
Using zero-party data to offer more relevant products and services will be a key aspect of marketing strategies for years to come. Personalization goes beyond knowing your customers’ names and emails. You need to identify their preferences — from their style preference to skin type, fit or favorite flavors — and use that zero-party data to deliver a more enriching customer experience.
To get those critical insights, start by asking for them. A recent survey found that 68% of consumers are willing to share information with brands they love in exchange for more personalized loyalty experiences and rewards. That last part is key — while data is important, it’s absolutely paramount that brands offer consumers mutual benefit and transparency in exchange for it.
Zero-party data is the information beyond name and email that consumers offer voluntarily to a brand. This could be gathered as a style quiz that captures clothing sizes, a request to join an SMS program or the option to join a brand’s loyalty program.
Many companies have been reluctant or haven’t seen a need to ask for zero-party information directly — but forward-thinking retailers and ecommerce brands are capitalizing on their existing customer base to find consumers who might have drifted away, reinforcing loyalty and referral programs and figuring out how to keep them engaged and delighted.
Brands need to incentivize actions beyond making a purchase. This can build a deeper relationship with customers and give the brand an opportunity to offer better, more personalized experiences and perks. Imagine if, after you order flowers from FTD for your mother-in-law’s birthday (very kind!) you get a text asking if you’d like a reminder ahead of her birthday next year. This gives marketers an opportunity to contact that customer two weeks in advance of the anniversary instead of the customer waiting for the last minute (or even forgetting) to place their order. This improves the brand relationship and drives repeat purchases.
Which Channels Work Best for Zero-Party Marketing?
There are several channels where consumers have been open to providing more data. Brands need to invest in the following marketing channels and tactics that capitalize on zero-party data to deliver more enriching customer experiences:
Loyalty programs: This is the gold standard for building relationships and gathering insights to drive more personalized marketing. Clothing brand Princess Polly conducted a flash sale campaign and saw a 10X ROI for loyalty customers versus customers not in their loyalty program. Ultimately, you want to drive your customers to join your program, and providing loyalty points for data is a more than fair value exchange in the mind of most consumers.
Style quizzes: Quizzes are a great way to learn customer preferences directly from the customer. Menswear brand Mizzen + Main asked loyalty members information on their height, weight and fashion habits in return for loyalty points, which enabled the brand to send tailored recommendations and offers of products designed to specifically fit each customer. Given how much fashion is shifting from formal to athleisure, apparel retailers could gather information on what types of clothes people are interested in and use this information to inform new product offerings.
SMS: Text based marketing is increasingly relevant for millennial and Gen Z shoppers. The speed and personal feeling of text messages can create new, interesting ways for brands and consumers to engage. What’s more, combining SMS marketing with a loyalty program helps supercharge both channels. Our customers have seen that 76% of loyalty program members are willing to opt in to communicate with their favorite brand through SMS. Princess Polly’s SMS marketing campaign resulted in a 64X ROI.
Customer reviews: Giving customers the ability to leave reviews invites the consumer to become a part of your brand. They feel like they are an expert on your brand and they are making a difference for the company and other consumers. Customer reviews can also send valuable signals: beachwear retailer Chubbies used reviews to not only give its most enthusiastic customers an early look at new product lines but also to find the best cities to open their next store. Lingerie brand Adore Me used reviews from wives to provide content for a campaign targeted at their husbands, by highlighting reviews from women saying how much they loved their husbands for their beautiful gift.
Reaching people through online advertising is just becoming more and more challenging (i.e. Google’s shifting approach). I really feel for online marketers today. But if marketers can invest in channels that effectively capture zero-party data, they can deliver more enriching customer experiences.
Zero-party data is more valuable and useful than commercially available data — it’s the fair exchange of value with a customer, from asking about clothing sizes to find a better fit, reminding them about important occasions or driving them to share how much they love their new purchase. These are the customers to focus on, because positive reviews can drive a 25% boost in referrals and lifetime value.
By collecting and using zero-party data to build personalized customer journeys at scale, brands are providing a true value exchange — deepening the relationships with their customers that drive loyalty and CLTV. Consumers want correctly targeted advertising — brands just need to stop thinking beyond five to seven segmented audiences and focus on what each individual wants. By building a more equal relationship with customers and focusing on giving them what they say they want, brands can cut through the noise to build deeper relationships.
Jordan Gutman is the General Manager of Loyalty and Referrals at Yotpo, the leading ecommerce marketing platform, helping thousands of forward-thinking brands accelerate direct-to-consumer growth.