More and more companies are beginning to see the important of effectively utilizing data to drive their business decisions. But to put it bluntly, data is messy. Some data is immediately usable when collected, while other pieces require some more analyzing and polishing. Some data can only be found in specific channels and or sources. And sometimes the most valuable pieces of data require in depth time and effort to be found, like digging for diamonds in a mine.
This is why creating reliable data sources is essential for your overall business strategy. Businesses with loyalty programs have a unique advantage because these types of consumer programs allow you to collect zero-party data directly from the individuals you want to know more about. And zero-party data can be one of the greatest sources of information your business can find.
What is Zero-Party Data?
Zero-party data is consumer data that is neither inferred nor observed but rather fully self-reported by the consumer themselves. Other consumer-data metrics, such as first, second, and third-party data can be self-reported through social media activity and stated demographics; however, what distinguishes zero-party data is that the customer proactively shares their data with a brand.
You can begin to think of zero-party data as when a customer submits a survey. Their responses and insights are intentional and includes personal context: how they would like to be recognized, what they want to see out of a specific service (in this case, their brand’s loyalty program), what areas they're dissatisfied with, and and so on.
How to Collect Zero-Party Data
The good news about having a loyalty program in place is that you are able to utilize it to incentivize your customers beyond a transactional engagement. Brandmovers is able to implement custom modules and integrations within your loyalty platform that serves a dual purpose of being both interactive and engaging for the consumer and deliver valuable zero-party data for your brand.
There are a few different ways your brand can leverage these interactive experiences with incentives to begin collecting zero-party data from your loyalty program. Questionnaires, quizzes, and polls can be valuable interactive tools to collect zero-party data because your brand can control the narrative. By designing questions that are aimed to encourage your customers to share their intentions of purchase, for example, introduces your customer to that topic and responding to it. Utilizing social media integrations to your program can also open opportunities for your brand to gather customer responses through social stories.
By incentivizing this process, the majority of your engaged program members will give valuable feedback that will drive the future of your brand’s loyalty program forward. Offering your customers a variety of ways to earn points by participating in experiences such as these will grow your program engagement and gather the valuable data you need to further personalize future experiences.
Why is Gathering Zero-Party Data Important?
Ultimately, zero-party data will pave the way for your brand to retain customers. Zero-party data gives you more accurate, up-to-date knowledge on what makes customers happy, what factors would cause them to increase or decrease specific behaviors and actions, and most importantly, the potential drivers that would cause customers to defect to a competitor entirely. Using these insights, brands can develop more effective retaining strategies and more impactful reactivation efforts. Thanks to the increased usage of AI and machine-learning within loyalty programs, zero-party data can also help brands improve their ability to identify and recognize the warning signs of potential customer defection.
It is important to keep in mind that the probability of selling to a new customer is 20% while selling to existing and loyal customers is upwards of 70%. This amplifies the significance of customer retention in your business and gathering the proper information on your existing customers to make their experience in your loyalty program more personalized will keep them engaged and appealed to your products and services.
To understand exactly how loyalty programs can help you collect and utilize zero-party data, get in touch with one our consultants today!