Loyalty programs are about to be presented an historic opportunity: Replacing third-party cookie ad-tracking capabilities with their own zero-party, or member-collaborative, data collection. Easy to say, but exactly what does that entail? Here are four essential guidelines for marketers aiming to gain the tech know-how to replace cookies, STAT.
When the Cookies Start to Crumble, Loyalty Should be Picking Up the Pieces
And it should be running with them. This is likely where the rewards of expert data collection and analysis will be realized in a year or so – within the loyalty initiatives already designed to collect shopper data through collaboration, not by stealthily tracking consumers on websites.
by Jenn McMillen
By 2022, Google will phase out third-party cookies (ad-tracking tools) on its Chrome browsers, and it won’t be replacing them with other third-party identifiers that follow where its online users go. The company said, in a blog statement, that it is doing so to preserve privacy and encourage alternate methods of personalized advertising.
Cookies track online activity and store data, using the information to send personalized ads that follow users from site to site. By removing cookies, and all third-party identifiers, Google will eliminate one of the key methods companies used to market directly to shoppers online. (Did you ever have an ad for a product that followed you around the Internet, stalker-like? That’s cookies in action.)
It also is bestowing to the loyalty industry a massive opportunity to become the main conduit for personalization and relevancy, by making itself the alternate to third-party data collection. That alternate is zero-party data engagement – using only data that shoppers intentionally and proactively share with brands.
Loyalty Program Operators, This is Your Moment!
As pointed out in a recent webinar hosted by Cheetah Digital, titled “Why is Loyalty the Key to Surviving the Death of the Cookie?”: 79% of consumers said they would prefer their brands to invest less in Facebook ads and more in their loyalty programs. Backing up that point: 45% said they made purchases via direct email offers in the previous year, beating out banner ads or social media ads.
So, great! Companies that operate reward programs have a year to prove how much better they are at engaging shoppers, one-to-one, than cookies. All they need to do is bring reward members into the shared-data process, and in return bestow personalized recognition and rewards that are more experiential and welcome.
What’s Step One?
The issue, as pointed out in the webinar, is that while many merchants and their marketers know what they need to do, they don’t know how. Factors that have been on auto-drive – procurement, terminologies, suppliers and investment – need to be mapped toward a different end game.
Then let’s put on our cartographer hats and start mapping. Here are a few guidelines to navigate the countdown to the cookie fade and zero-party data’s rise.
Know the ingredients to get there.
Organizations should ask their internal teams or third-party vendors how they are readying for the zero-data opportunity. They should be prepared with pinpoint questions to suss out weak spots: How long do they retain customer data? How is it stored and protected? How extensively can their analytics hyper-personalize the experiences? What tools do they use to collect self-reported data (such as web surveys) and how fast do they process the insights? What are their machine learning capabilities? Based on these responses, the organization and vendor can build a data improvement plan and roadmap with plenty of time for testing.
Prove your worth in the value exchange.
While the new processing systems are being tested, the organization should honestly assess its current “bullseye” score with loyalty members. According to research highlighted in the webinar, 42% of consumers say they get irrelevant offers and 30% said they received “creepy” personalization based on information they did not share with brands. Zero-party data eliminates that frustration because it invests an individual’s data exclusively into experiences for that person. This requires giving members the choice of what they want to share, so they should be invited into the process now. Preference centers are a good method of doing this, as they enable organizations to manage a customer’s intentionally shared preferences and information across digital communications, such as email and texts.
Avoid entanglements through all-party collaboration.
Along the way to bringing members into the zero-party plan, organizations should use their insights to locate and simplify overly complex areas in the data pipeline. Yes, the task of transforming current loyalty analytics into “live” deductions of specific shopper needs requires a complex formula, which can hinder organizations that are understaffed in areas of analytics and insights. However, that doesn’t mean a third-party vendor, marketing automation software or an organization’s own marketing department shouldn’t be able to finesse what’s happening within the machinery. Reciprocity breeds simplicity. The deployment of data into practical insights should be painless, and the vendor should prove at every turn that the customers’ best interests are in mind.
Make loyalty a company-wide endeavor.
Once the tools and guidelines are simplified and formalized, the organization can embed its one-to-one-focused loyalty initiative into its broader customer-engagement platform. The goal is to make it possible for all departments to work from one data set, so each team has a clear view of what the customer expects in return for sharing data. Doing this enhances communication and ensures a more responsive experience, and it introduces opportunities for other departments to squeeze more shared value out of the data. For example, depending on how frequently a customer selects to receive email messages, the design team can develop varying templates that would build on themes and reflect interests.
Lastly and most importantly, organizations have to continually test, tweak and believe in what they are promising. Once customers gain control of their data, it will become more fluid. It will no longer be a block of broad-population information that can be applied to pre-identified segments. Some segmentation will remain, in terms of preferences and prediction, but how it looks and is interpreted will change as shoppers expect more precise and immediate communications and rewards.
The companies that start preparing now will receive the greatest rewards – genuine customer trust and loyalty. The others will be left with the crumbs.
Jenn McMillen is Founder and Chief Accelerant of Incendio, a firm specializing in customer-facing initiatives, whether it’s marketing or technology. Incendio builds and fixes marketing, consumer engagement, loyalty and CRM programs, providing a big-agency approach to marketing needs without the big-agency cost structure, and is a trusted partner of some of the biggest U.S. brands.