Last week’s WhatsApp-Facebook data sharing announcement prompted a flurry of contacts to join me on the secure messaging platform, Signal. Mainstream documentaries, movies and books are waking consumers up to the data trail they leave behind, and to the growing personal and societal risks we face. Our customers no longer want to be the product. Yet paradoxically, they continue to sign up for free services, for which they pay, inadvertently, with their personal data.
Privacy regulations and enforced fines are raising the barriers to the use of second- and third-party data. As marketers we need to rethink not only how we acquire new customers, but to redefine what we mean by Customer Relationship Management. We are encouraged to let go of third-party cookies, lookalike audiences and opt-in by default. The question remains, what do we replace these practices with so we can continue to grow and retain our customers?
The first thing to remember is that consumers focus on benefits, value and convenience. The second is that although consumers can be freaked out about privacy, they neither understand nor care about data. And thirdly they will intuitively gravitate to brands that care and show respect.
Zero Party: Better than Predictive
A customer’s exposure to your brand has evolved from above-the-line advertising on TV, radio and billboards, to contextual ads online and in print, to targeted ads based on behaviour and finally to micro-targeted ads based on predicted behaviour. The new privacy tech platforms envision something better than predictive – where consumers voluntarily offer intimate insights into their lives, desires and intentions – enter ‘zero party’.
First party and Zero party may be the same data, but they are conceptually different. That difference is summed up by the consumer’s Agency over data about them. First party data can be freely collected as transaction histories, survey responses and first party cookies, all implicitly collected under a consent agreement. Zero party data is any data that the user has explicitly shared in the knowledge that the data will be used or shared between known parties for a specific purpose for a specified time.
Zero party can include first party data, but can also go much further. For example, a bank will have a record of daily balance history and deposits made to the account, from which an insight can be drawn as to how the customer manages their budgets. The bank will use that information internally to determine if the customer qualifies for lending products and certain interest rates – legitimate use of first party data. When the customer is looking for a mortgage from a mortage company, or financing on a large purchase, the lender has to request special permission from the customer for the bank to provide that information. The idea behind zero party is that the customer has the ability to share that data themself in a transparent, and controlled manner.
What’s in a Relationship?
This is dating 101, if you want a relationship don’t try to get intimate too early. Many first B2C interactions ask for a lot of detailed information or seek commitments. “But we hardly know each other!” is the appropriate response.
As Bernardo Crespo says in his post Zero Moment of Trust, “[it] is about caring about people in each and every interaction. Showing them you care about that precious stuff (data borrowed from users) that keeps your business thriving. Thus, building TRUST in a pervasive and accidentally digital context.“
I see three goals to building sustainable and valuable relationships in the age of data proliferation.
Goal 1: Develop Dialogs
What might your customers reveal over time if you are engaged in a dialog with them? Citizen.Me is one example of this, providing organizations with a rapid way to reach and survey customers on different aspects of their lives over time. The data remains on the users’ device, and is shared anonymously with other organizations and the user is paid a dividend. How do you engage your customers in a productive dialog and what benefit might they get from participating in that conversation?
Goal 2: Remove Friction
What are the points of friction that exist in the customer experience and how can data be used to remove them? Valido is a Zero Party Open Banking mobile app, the consumer’s data stays on their device and the data is pulled directly into it from your bank account with explicit permission. Valido calculates key insights about financial health and habits, those insights are authenticated, therefore when shared with potential lenders can bypass lengthy and inconvenient loan approvals for smaller amounts. What friction could you remove from your users’ experience if you were given direct access to new information about them?
Goal 3: Create Unique Value
What new value can be created out of the consumer data you have access to? Roamina is a mobile consumer-side analytics app that gives insights into their own financial habits. The consumer has full control over that data and is able to share it though the application with different service providers that will simplify their life and provide valuable offers. What unique services can you create if you had access to additional data from your customers?
Governance, Transparency and Control
The three steps require some assurances that a customer’s data will be safe in your custody. Banks, as custodians of your money, have long understood this. The banking experience is explicit in offering governance, transparency and control. Likewise, as a data custodian on behalf of your customers, the analogy is secure and reliable systems, transparent user experiences and agreements as to what is done with your data. Woven into the product or service, they help build that trusted relationship with your customers.
I see three ways to assure your customers that they can trust you with their data.
Assurance 1: Secure Systems
It’s likely you manage your customer interactions using a CRM, DMP or CDP system. It is unlikely they will allow your customers access to their own data and have the ability to share aspects of that data with other organizations. There are a new generation of systems in early use that will enable those features. Guer is one of those new technologies that externalizes customer data from the corporate app, allowing the customer to manage that data on and access permissions from their own device. What benefits could there be to decentralizing your customer data?
Assurance 2: New User Experiences
Most customer interfaces and user experiences have been recently optimized for consent despite an insatiable hunger for data. Consent dark patterns abound where the user is essentially tricked into giving consent through deceptive user interface elements. How could you create an enlightened user experience where the user is aware of the lifecycle of their data? The paywall has been a troublesome device for news media creating higher dropoff for site visitors. Spanish startup’s Nodo app presents news site visitors with a sponsor or preferences wall, offering to unbundle content from ads and trackers, so that news content is presented on its own and ads follow by email (which is never shared with sponsors or advertisers). How does the user experience change if you want to create full transparency for your users?
Assurance 3: New agreements
As we shift ourselves to a far more digital world, where physical presence is not a requirement to make a transaction, being able to authenticate a customer and allowing them to trust that they are dealing with a bona fide company becomes critical. Digital services that rely on faxes of physical documents create both doubt and friction in any process. Evernym provides an enterprise grade platform that will allow your customers to say who they are and know they are dealing with your organization, as a service or embedded within your loyalty application. What becomes possible when you and your customers are certain who is on the other end of the line?
Goals and Assurances: Making it happen
Building new customer propositions around zero party will take time, and will involve a change in mindset about how you collect and work with customer data. At 3PointsDIGITAL we understand the transformative power of data and we have worked with some of the world’s largest B2C brands on their digital products. We have relationships with the technology infrastructure providers that will bring zero party to life.