As marketers continue to prioritize transforming digital customer experiences in 2021, they must focus on using new data and technology practices, including zero- and second-party data collection and cloud implementation, shares, Beth Billingsley, senior director, tech strategy, Merkle.
Most organizations are facing pressure to take on significant business transformation projects. In addition to third-party cookie restrictions and data regulation, demands like new pandemic restrictions, the shift to more digital interactions, and the ongoing demand for contactless experiences have pushed companies to move faster with their digital experiences. Even before these drivers emerged, customers were already clamoring for better experiences. They want the 2025 version of digital interaction, but companies are stuck with 2020 platforms at best. Every bit of progress one company makes sets the bar higher for every other company. This is pushing marketers to innovate quickly, and innovation requires large-scale transformation.
Experiences need to be personalized and orchestrated at every step in the customer lifecycle, regardless of the department, channel, or relationship stage they are in. The experiences have to be connected across marketing, sales, commerce, service, social media, and app. The store and call center experiences must be in conversation with the website and digital media. This connection relies on customer data and identity and the underlying platforms, systems, and data stores which make it useful. An integrated data platform is necessary to put an entire identity and experience program into place. Merkle’s recent Customer Engagement ReportOpens a new window found that 44% of respondents see an integrated data platform as their biggest gap in delivering real-time, omnichannel personalized experiences.
Learn More: Zero Party Data: An Answer To Consumer Data Privacy and Better Personalization
Zero-Party and Second-Party Data
With third-party data becoming less available, companies are looking for new data sources to fill in their customer data assets.
Zero-party dataOpens a new window is that which a customer intentionally and proactively shares with the company. It can include transaction intentions, preference data, personal context, and what the customer thinks about the company. Zero-party data will become increasingly crucial as third-party data sources become less available and reliable to complete private identity graphs.
Ideally, zero-party data can be some of the most valuable data acquired. Marketers do not have to infer customer preferences or behavior through secondary behavior but are instead explicitly told straight from the source through conversations, surveys, forms, and other mechanisms. The best zero-party data arises when customers trust the brand and are willing to volunteer their data with the understanding that it will improve their experience. Marketers may also offer incentive programs in exchange for personal information. These could take the shape of coupons, discounts, information offerings, free content, early/privileged access, rewards and points, or gamification plays.
Another valuable source of data that will have increased value with the death of the third-party cookies is second-party data. Second-party data is data that is shared by partner companies, alliances, and consortiums. Second-party data can be used to create new addressable audiences for prospecting or to enhance existing data in the company’s zero-party private identity graph.
These partnerships are typically made between non-competitive organizations that stand to benefit from collaboration. For example, digital content publishers who have relied on programmatic display advertising through brokers may be willing to offer data to brands that value access to their readership. Companies may find partnerships that align two brands that will not cannibalize each other’s audience. The subsequent second-party connections need to be “people based†(i.e., designed with the audience in mind first).
Retail Media Networks are an emerging second-party data source. Here, large big-box retailers, grocers, and other companies with large shopping audiences sell display space on their ecommerce pages, offering non-endemic brands a chance to co-mingle their data with the retailers and identify likely customers.
Learn More: Data Interoperability: The Future Gold Standard of Identity Management
The Cloud Is the Way
With these shifts in strategy, new sources of data, new programs, new alliances, etc., successful technology is the instrument for meaningful transformation, but it can also be an obstacle. In a traditional IT environment, every new data instance, platform, and capability has to be painstakingly planned, justified, and then slowly built and scaled over time. The traditional IT implementation process is too slow and limiting for our new reality.
Moving marketing operations to the cloud solves this problem. The cloud enables technology to come online fast without the risk of overbuilding or limiting functionality. The cloud makes technology and data more flexible, with on-demand capacity, functionality, and pricing. It enables quick scaling, both up and down. Implementing on the cloud changes how data and technology can be planned and justified.
Rarely do such fundamental customer and operational states change as quickly as they have in the past year. Capitalizing on customer data and identity continues to be a key in understanding customers and driving great, personalized experiences. But, in many ways, it is getting harder. The good news is that the technology is here and obtainable. Integrated data platforms are increasing in power and maturity. Consumer data is still available in the form of zero- and second-party data, and the cloud provides an unprecedented ability to move quickly. Actioning on new marketing strategies is essential now, and the best are already making their moves.