Data use is on the rise. According to KPMG, 70% of companies are increasing the amount of personal consumer data they use. But it doesn’t come for free. To make their investment worthwhile, organizations need to ensure they’re getting the right kind of data.
Declared data is a relatively new phenomenon that contrasts many of the practices companies have become used to. It puts a focus on how data is collected, which has implications for the kind of data companies receive; but also its impact on customer trust. Read on as we take a closer look and explore four benefits of declared data.
What exactly is declared data?
By now, it’s well established that third-party cookies are on their way out. These tracking codes have been used for years in an effort to learn more about customers based on their activity across the web. But with Google phasing them out by late 2023, organizations will become much more reliant on first-party data to get better acquainted with their target audience.
First-party data is anything that’s collected by the brand – the first party. It usually refers to data about users’ activity on an organization’s site – from clicks and browsing times to account information. In other words, data that’s collected implicitly. But it actually has a much broader scope.
There is another kind of first-party data, which is explicitly collected. This is what’s known as declared data. Rather than being taken as users browse a brand’s website, create an account, or make an order, declared data is knowingly shared by customers. Rather than being a by-product or necessary evil, consumers are completing an action where declaring data is the primary purpose. Most importantly, consumers provide explicit consent when doing so.
The benefits of declared data
At surface level, there’s a clear difference between data customers knowingly give and data that brands take while consumers use their site. But dig a little deeper, and the difference becomes even more distinct.
Here are four clear benefits of declared data…
Firstly, and most importantly, declared data goes hand in hand with trust. 86% of consumers say that data privacy is a growing concern for them and 68% are concerned about how much data businesses collect, while 40% don’t trust companies to use their data ethically.
In the same survey, however, 40% of people said they would share data if they knew more about it. More specifically, who would be using it and how it would be used.
Why does trust matter? It leads to sales. Trust is critical when customers decide who to buy from. Consumers put it second only to price, with 70% saying that trusting a brand now is more important than in the past.
Simply put, if an organization is focused on obtaining declared data rather than implicit data, customers will trust them more, be more likely to buy from those brands, and be happier to share their data.
Another difference with declared data is what it tells you. Traditional first-party data shows what customers click on, look at, buy, and so on. Declared data goes beyond that, with invaluable insights into what customers want and need. That allows brands to provide a truly personalized experience – on their site, and beyond.
Here’s where it gets tasty. According to Accenture, 91% of consumers are more likely to shop with brands that recognize and remember them, providing relevant recommendations and offers. Declared data allows these brands to do exactly that, connecting with customers based on their values and preferences, rather than simply their browser activity.
Let’s not forget the compliance hurdle. In a world where data compliance is becoming more important and more rigorous, it’s vital for companies to stay on the right side of data protection laws. Not least because of the fines – up to €20 million for GDPR and $7,500 per violation for CCPA.
Declared data is more likely to adhere to the relevant regulations. Brands just need to ensure consent is actually confirmed, as well as being implied.
60% of customers say they’re comfortable sharing information with brands they have high trust in. The more an organization focuses on transparent, declared data, the more customers will trust them – and the more information they’ll be comfortable sharing.
It’s an ongoing cycle which continues to build trust and strengthen the business-customer relationship. With 75% of people with high brand trust saying they’ll buy a brand’s product even if it isn’t the cheapest, that loyalty will have a positive impact on the bottom line going forward too.
Capturing declared data
The power of declared data is clear. But there’s a reason why so many organizations still rely on conventional first-party data or even third-party cookies (for now). They’re quicker and easier in the short term.
While it does build trust over time, declared data also relies on trust to get started. You’re essentially asking people for their information, after all. With that in mind, you need to be completely transparent at every step. Whenever you ask for data, be clear about what it’s being used for – and stick to it!
The other factor is engagement. If you’re just getting started with declared data, most customers won’t have a reason to give you their data just yet. Simply put, you need to engage them by giving them something in return.
That’s where 3radical can help. We design and build bespoke customer engagement solutions using gamification to create a two-way, mutually beneficial, value exchange between brands and their customers. From direct to consumer experiences for pet care companies to in-restaurant interactions for casual dining chains, we help organizations in a wide range of sectors engage customers and obtain declared data to learn more about their audience.
If you’d like to get started with your own declared data strategy, we’re ready and waiting. Contact our team today to talk more about your requirements and how we can help.