The wild plains of data collection and activation are vast, so it's not surprising that we get lost in terminology along the way. But vocabulary isn't the only thing tripping us up; how we obtain and subsequently use customer data is becoming increasingly important to your customers and the broader public.
In the past year, you've likely heard the term 'Zero Party Data', perhaps brushed it off as another industry buzzword, not worthy of note. I get it; the barrage of acronyms and "hot topics" is overwhelming at the best of times, let alone the dumpster fire that is 2020 - but placing this particular subject in the "too hard" basket runs significant obsolescence risk. We needn't look further than the Cambridge Analytica Scandal, recent antitrust hearings or third-party cookie blockers to see why.
Traditionally defined as 'information a customer intentionally and proactively shares with a brand', we're adding 'and actively delivers value to the customer' to the definition.
This should not be confused with First-party data, which you may be actively collecting directly from the customer as a byproduct of their interactions with you, but they may not be explicitly aware of this, and it is not available to them to use.
As data becomes more central to the way brands operate, there's an ongoing focus on the potential consequences of data collection; here are a few reasons why:
Intrusive advertising, surveillance and over-fishing have led to an entirely new kind of consumer backlash. And while this is occurring, legislatures around the world are listening and taking action.
Over the past two years, marketers have been reigned-in (rightfully so, in many cases) by sweeping legislative changes that touch on, and seek to control, the entire spectrum of customer data. Yes, we're speaking of GDPR, CCPA, Australian Privacy Principles, etc., and there are hundreds more that are currently in process. Read our take on the latest ACCC loyalty scheme findings here.
Device makers such as Apple are also actively warning their customers of specific apps and sites that track too much and proactively block many attempts to track what you do by default.
So, customers began waking up to how their data is used, and brands have started a slow progression to move closer to the source of their customer data – which is, unsurprisingly, the customers themselves.
It's our responsibility as brands to show customers that their data is used for the right reasons - and it is contingent upon us as business leaders to articulate what those right reasons are.
The pressure to innovate is real, and that can sometimes force some interesting behaviours, but owning the role your business plays in the broader ethical conversation is an integral first step in shifting the thinking about customer data, from a God-given right to a privilege to be handled with care and respect.
Openly obtained data produces deeper customer insights, allows for deeper engagement, and ultimately enables brands to serve their best customers more effectively - a data set curated to deliver the differentiated audience retailers need.
Social responsibility has been a top priority in recent years, and the current crisis is likely to accelerate this trend. McKinsey's recent research on Australian trends shows a growing culture of doing the right thing, looking after society, and "being all in this together." The current surge of activism is likely to give consumers a greater sense of their power in holding more influential organisations to account. More than 60 per cent of households claim that how a brand responds during the crisis will have a massive impact on whether they continue buying it when the situation is over.
Meaning marketers must communicate a strong sense of purpose - the causes that they stand up for, the protection they place around data and how they enact true customer-centricity. Brands can do this through the projects they choose to be involved in, the partners they choose to work with, the way they treat their employees, and the messages they send to customers.
As socially and morally responsible brands, we always comply with data regulations, but can we apply the same commitment to doing the right thing for the customer? By putting the customer at the heart of every data decision made, we become advocates for zero-party data - data that is willingly provided and used by the customer.
Now more than ever, brands have access to more sophisticated technology choices that allow customised messaging and approach. But also has the potential to create new headaches - brands will need to back up bold customer-centric statements with real action. Brands will need to make clear commitments to causes they believe in or risk newly empowered consumers calling them out.
Tess O’Brien
