How to gain first-party data without creeping out your customers
Privacy invasion might be one of 2019’s biggest issues, and the controversy, particularly concerning what brands are allowed to know and use about customers, is poised to continue into next year. Against this backdrop—and growing regulation, like the California Consumer Privacy Act—marketers are reconfiguring their strategies. Some, particularly direct-to-consumer brands, rely on first-party data to make important decisions about products and operations. Yet that reliance is more challenging when shoppers are more protective of what they share, and with whom.
Dipanjan Chatterjee, VP and principal analyst at Forrester, notes that d-to-c brands have seen success because they are able to “intelligently deliver maximum value against the uniquely individual need set.” If consumers are less inclined to share, the sales success of both newer e-commerce players and traditional retailers could wane. “There’s more to personalization than giving customers what they want,” says Chatterjee. “It’s about respecting what they don’t.” Here’s how marketers can persuade customers to share their data.
Get in the trust zone
Customers are more inclined to share their information with a brand if they trust the brand not to sell it to others. “If a brand has built up the equity and track record to engender trust, many more people, even those normally skittish about entrusting others with their information, will share,” says Chatterjee.
“We’re not aggressively going after information,” says Ashley Merrill, founder and CEO of Lunya, a five-year-old sleepwear brand. “We try to make sure people give us information as they feel comfort and build trust with the brand.”
Part of that trust comes from providing value. Consumers would be happier buying from a brand if they are receiving something in exchange for data. At Kohl’s, the company counts approximately 30 million active members in its loyalty program. The retailer knows more about shopping habits of those shoppers, who in turn receive more discounts, promotions and tailored product recommendations, says Greg Revelle, chief marketing officer of the Menomonee Falls, Wisconsin-based chain. “All of that content is made better with the data we get from the loyalty program,” says Revelle.
Armoire, a subscription-based clothing rental site, collects user feedback on style to provide a curated assortment of choices—narrowing dozens of pages down to a select few. The company gathers the data and then provides a more relevant, personalized experience, says Cynthia Houlton, head of revenue.
“The idea of first-party data is this give and get,” says Houlton, adding that relevancy is also key. “What we’re asking is directly related to the services we provide.”
Keep it clear
It helps to be as transparent as possible, and to give customers a choice. Houlton says Armoire uses a private Facebook group where customers can opt into sharing information about themselves and their experiences with the brand. Armoire is able to use this feedback to improve its operations.
“We’re in a really interesting time of angst over personal information, but most of us aren’t going to go off the grid either,” says Houlton, noting that clear messaging is crucial. “Are you aware that you’re giving information, and do you want to give that information in exchange for something?” She adds that as consumer brands, “we all have to do a better job of communicating the give and the get.”
Use all assets to gather information
While many marketers are focused on the digital realm, including Facebook groups or emailed exchanges, they shouldn’t overlook the effectiveness of brick-and-mortar in gathering consumer insights.
Rockets of Awesome, an online site that sells children’s clothing, recently opened a pop-up shop in New York City. Founder and CEO Rachel Blumenthal says the physical location has been a strong tool in collecting data like email addresses. At the store, shoppers are encouraged to tell the brand how they discovered it—each consumer can put a glittery bouncy ball in one of about 10 jars that represent different responses, like “From a friend,” or “Through social media.”
Blumenthal says the method has been successful because it is fun, analog and different. “It makes it more relatable and a data point that our sales associates feel connected to” she says, “It’s right in front of them, rather than something they have to digitally input,” she says.