Making the Connection: Zero Party Data and Your Loyalty Program

Brands have relied for decades on third-party cookies as a primary tool for developing customer profiles for marketing and retargeting purposes. But with a crackdown on these cookies, as indicated by Google’s devaluation of them as the most popular identifier for advertisers, and a set of privacy policies that legislators will enforce at the state level, businesses can no longer rely on third-party data to map out their long-term marketing strategy. As a result, first-hand data has become a critical asset for companies large and small. The future of data-driven marketing plans will require brands to rethink their traditional marketing practices, one based on buying ads and posting on social media, and refocus programs on building loyalty and engagement platforms.

Today, consumers have more power over personal data than ever before, and brands must refocus their commitment to a consensual and transparent data collection process to ensure that they can still deliver the personalized and customized experience that customers expect. Consumers have come to expect a certain level of personalization from brands, which requires a level of attentiveness from the businesses they interact with. Investing in personalization efforts to build a loyal following often takes commitment by the brand to invest in platforms that provide insight into the guest experience, as well as a dynamic shift in how they analyze the data and provide value to the customer. 

Forrester coined the term several years ago to describe data that consumers willingly and proactively give to a brand. Unlike second and third-party data that provides marketers with implicit information based on observed consumer behavior, zero-party data consists of explicit information that consumers share with brands through purchasing habits, customer service surveys, and other conscious brand loyalty interactions. Since zero-party data is information that customers share directly with brands willingly, consumers have high expectations on how a brand securely collects and utilizes their personal information. New online polling conducted by YouGov among 1,200 U.S. adult consumers in April 2021 revealed that 88% were willing to share their information if they saw value in the exchange.

The only disadvantage of zero-party data collection is that customers run the risk of feeling overwhelmed if you ask for too much information or don’t provide value as part of your loyalty engagement with them. Customers are increasingly aware of the importance and power of their data and expect an equal exchange of personal data and personalized experiences as a value. 

Zero-party data provides marketers the ability to collect valuable and actionable information about customers at a time when data mining and use can be challenging. It also allows brands to build direct relationships with consumers and, in return, to better personalize their marketing campaigns, loyalty offers, and SKU-level recommendations. Brands can deliver interactive experiences that serve a dual purpose: they engage with offers, collect opt-ins, and in exchange, provide a pleasant experience with tangible value to consumers. 

But there are qualifiers at stake. Customers and subscribers who supply this information do so because they have comfort, trust, and loyalty to the company. Their interactions with the company are personalized on their terms. The information a customer provides a business gives them the expectation that their data sharing will reward them with a better 1:1 brand experience. 

Managing this type of customer data with siloed systems and inefficient data management processes is virtually impossible. Loyalty solutions, on the other hand, are an indispensable tool for the collection, management, and gathering of insights from a restaurant brand’s customer base. 

There are a number of ways that loyalty programs like Punchh’s engagement and loyalty product collects and uses data to provide a richer customer experience. First, they offer an enormous opportunity for marketers to implement systems that easily and quickly capture and integrate multiple data sources across various channels. They can seamlessly integrate with a range of existing systems and solutions to collect data from your entire ecosystem, consolidating it into 360-degree individual customer views, with the ability to merge identities from multiple devices into one, and segment customer records without the need for substantial IT resources. And with native AI and ML from Punchh Merlin, you’ll have access to machine learning to determine the “wrong” content, the right offers, the proper channels, and the correct sequence of events that will lead to automated paths to conversion. 

Your loyal, spending-minded customers deserve a personalized experience that depends on data-driven insights, even when third-party cookies are a thing of the past. And your brand needs to be ready to serve them up. It’s time to move past antiquated systems that don’t offer unique insights and segmented offers into a future where loyalty will be a marketer’s primary data resource. In a competitive market where customers are increasingly clamoring for personalization and customization based on their preferences, loyalty programs are a way forward.