What data should you be paying attention to?

/ 20 May 2020

With all the nomenclatures for types of data floating around, are marketers getting hung up on the wrong thing? As a point of clarification, by definition, here’s what we’re dealing with:

Third-Party Data – bought from data aggregator firms

Second-Party Data – another organization’s first-party data / affiliate partnerships

First-Party Data – automated data organizations collect directly from customers

Zero-Party Data –data customers generally are incented to share with an organization

READ: New ‘How to Align Data Collection with Customer Engagement’ Report

A lot of this data collection and compilation is commonly automated, and much of the way it’s used is based on inference and assumption and far too often ignores the consumer.  This has proven to be problematic. One does not have to search far to see the sweeping legislative changes impacting data collection and subsequent utilization of data.  Change is now taking hold and gaining momentum throughout the US and Europe, as regulators are now defining compliance requirements that must be accommodated when using customer data. Moreover, consumer trust is at an all-time low. They not only are aware of the data they provide, they want to define how and for what their data is used for.  Beyond a preference center, consumers want and expect organizations to know them and to accommodate their needs based on data they’ve shared, not what’s been purchased on the open market.    

How companies obtain data and how they subsequently use it is becoming increasingly important to the individual consumer. So how do businesses capture data when consumers are concerned about privacy and legislation is bearing down?

Flip the approach.

What if customers chose to tell you about themselves? What if they saw the value in doing so? What if appropriate value exchanges made everything a whole lot easier?

Earned data’ is a different beast to first, second, third, fourth, fifth (or whatever) level of party data that might be offered. It’s transparently obtained and allows for deeper levels of engagement that helps brands better serve customers

It’s not necessarily the same then, as personalization. Businesses don’t need to know everything about customers (and it’s highly unlikely that customers would want them to). We must move beyond purely transactional engagements, to understanding intent and sentiment, and we must do so with consumers fully in the driving seat.

Earned Data Mechanics

So how do we do that? Powerful game and motivational mechanics combined with meaningful value exchange.

Check out an example of the earned data experience for yourself!

We help brands move closer to the source of their customer data – their actual customers – though our platform Voco. It enables customers and employees to interact with organizations on their own terms. Voco’s real-time decisioning engine is able to combine game science theory, data accumulated from billions of interactions, and real-time self-reported data, resulting in the optimum blend of interactive content, rewards incentives and channel for each engagement.

A simple but powerful example; we helped restaurant chain Zizzi earn data through a virtual board game. That data improved the restaurant chain’s marketing, built stronger brand loyalty, increased customer retention, and improved engagement by a multiple of 32. The game, which rewards players with in-game and external rewards in the form of vouchers to be redeemed in store, gathers important information such as dietary requirements and preferences that not only help marketers in their targeting, but which genuinely improves the experience of the diner.

The approach has increased engagement frequency and is especially effective at driving traffic to Zizzi locations at off-peak hours, helping revenue growth during the least profitable hours and times of the year. 

Why does it work so well? Small but powerful motivations are at play, including: ‘win state’ (working to achieve rewards creates much greater value perception), ‘scarcity through exclusively’ (we humans want what is hard to get), ‘the endowment effect’ (our psychology changes when we have won and now own something), and so on. Gamification in this setting has created desirability and driven people in store to claim what they’ve earned. In return, the store earns what it needs to know about those playing and claiming rewards.

30-40% of the Zizzi audience that engage with 3radical mechanics continue to do so 24 to 36 months after the original engagement.

This is one example of 3radical’s Voco platform; at the other end of the spectrum, we work with one of the largest banks in APAC to attract, retain and engage customers on its digital platform. The industry may be different but the core principles of creating long lasting relationships that provide greater value to customers, are very much the same. 

Earned data is willingly and transparently provided and is of enormous value. The regulator environment is changing (GDPR, CCPA, NYPA). Google is phasing out third party Goggles. Consumers know the value of their data.

The tide is changing, and that’s good! It’s time to earn customer data, I promise it will be worth it!

DOWNLOAD: ‘How to Align Data Collection with Customer Engagement’ Report

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