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Zero Party Data and Loyalty Programmes

Zero party data naturally complements loyalty programmes. The success of loyalty programmes is predicated on the business’s ability to provide relevant incentives, rewards and discounts to their loyal customers.

This is only achievable if the business understands what its customers are interested in.

Even the most basic, points-based, loyalty programmes benefit from zero-party data. In this instance, it can make discount vouchers more attractive to the customer, increasing conversions.

The challenge for businesses is migrating from a predominantly first-party data loyalty programme model.

Third party data works well with loyalty programmes. As it’s based on customer behaviour, you can track with reasonable accuracy what they want.

However, the big problem with third party data is that it’s retrospective, it’s essentially old data. That’s not to say it’s useless but any marketing becomes a highly educated guess. Not to mention your customer data platform has to continually ingest third party data to keep communications relevant.

Zero party data is information willingly provided by your customers which makes it more likely to be accurate over time. Especially if you can foster a dialogue that keeps that information up-to-date.

Capturing Zero Party Data

The effectiveness of any data-gathering operation largely depends on the technology you use and how you communicate with your audience. 

This is especially important when it comes to any kind of VIP or loyalty programme. A lot of retailers and sports betting and gaming companies fall into the trap of making their loyalty programmes available to all, almost without exception.

The logic is that the sooner you get them enrolled the harder it is for them to leave. This is partially true but it’s predicated on the notion that there isn’t a better offer elsewhere.

Supermarkets are especially guilty of this. If customers are accruing points then they’re more likely to continue shopping. While this is true the value exchange is very low. Therefore if a cheaper retailer moves into the area or a competitor offers a better points programme, the customer will vote with their wallet.

Similarly in SBG, if a VIP programme is solely based on making a deposit then the value exchange is unbalanced. Operators have to give away free spins and other incentives to establish the credibility of the VIP programme. To claw back those losses, operators either have to rely on players losing or reduce incentives to offset initial losses.

The player experience declines as a result and without further engagement or incentives the player is at risk of churn. 

By focusing on acquiring customers who spend high and spend often, or players who make regular deposits and play regularly too, loyalty programmes can be focused on value exchange-based retention strategies.

Once you’ve identified your ideal audience, you can invite them to join your loyalty programme.

Assuming they click on the link then you’re in a position to ask the questions you need answering. The more insight you can gain, the more effective your marketing and your loyalty programme will be.

What Zero Party Data is Required?

This entirely depends on your industry and what you’re trying to achieve. The most effective loyalty programmes are ones that focus on delivering value.

Therefore, the more you know about your audience the easier it is to provide that value. However, just because someone has agreed to sign up for a loyalty programme doesn’t mean they’ll give away their deepest and darkest secrets.

At this stage, the offer and acceptance of a loyalty programme membership is an expression of mutual interest. Not a show of mutual trust. That has to be earned. 

The questions you ask need to reflect (and be respectful of) that. Keep it simple and keep it brief, nothing is stopping you from asking for more information in the future. 

Some marketers fall into the mindset that their questions are a nuisance. Perhaps they are but let your customers tell you it’s a problem. 

If you don’t ask, you don’t get.

Just remember to keep your questions specific to provide a better, more personalised service. Customers will quickly disengage if you feel they are being taken advantage of.

Useful data can include product preferences or favourite games (in the case of SBG). Knowing what offers, promotions or incentives they are more or less likely to respond to is also useful.

Depending on how seriously you take customer engagement, you can even ask them what they hope to gain from being a loyalty member.

Never underestimate how low some customers’ expectations can be, so take the opportunity to demonstrate value.

Putting Zero Party Data to Work

Any data, even zero party data is only valid for a short period. Even though it’s information provided by the customer, circumstances and preferences change. And they can do so rapidly. A change in circumstances can render much of a customer’s zero party data obsolete.

Creating a robust process to regularly harvest customer zero party data will overcome issues like this. Especially if you blend it with third party data.

Third party data is based on actions the customer has taken. Utilising both data sets allows you to identify changes in behaviour and adjust your communications accordingly.

Providing you’re ingesting, analysing and segmenting data in real-time, you can keep your communications up-to-date and relevant.

Moreover, there’s something very powerful about a business changing the way it talks to its customers at just the right moment.

Managing Zero Party Data Disparity

One of the biggest challenges associated with zero party data is navigating the inaccuracies. Although zero party data is provided by the customers, various factors can make the information inaccurate. 

Not least, how a customer wants to be perceived by the brand they’re engaging with. An extreme sports brand might elicit more energetic responses than a fashion brand.

This has a lot to do with the perceived value exchange threshold. Customers who want to belong to a brand adjust their answers to ‘fit in’ better and therefore curry favour.

In reality, all it does is throw off product recommendations and content suggestions. This diminishes the relevance of the communications and harms the relationship with the customer.

Again, first party data can serve to moderate these stated preferences. By comparing the zero party data to product searches and purchase history or player data and deposit history, you can segment your audience data more accurately.

Applying Data to Campaigns

Providing you have your zero party data flywheel of ingestion, analysis and segmentation working well, it can be put to work.

To make the most of this data you have to adopt an omnichannel approach to your communications. That means putting what the customer is interested in at its centre, not what you want to sell.

By taking this approach you increase the chances of making the sale because you know what they’re interested in.

That doesn’t mean you can’t push new products or new games. In fact, the zero party data and third party data you collect on your loyalty members will tell you who among them will be most receptive. 

Your best loyalty members are the ones who pay full price or deposit without incentives and do so often. This is the audience who will respond most favourably to your ‘new release’ communications.

All your other campaigns can be highly focused on what interests your audience the most. Adding value in this way not only boosts conversions but increases spend and keeps the customer for longer.

More so if they feel like a valued part of the loyalty community. Essentially, what you’re aiming for with your loyalty programme outreach is a sense of pride and exclusivity.

When your audience feels special they respond in kind and they’ll tell people about it too. Then your loyalty members become your advocates. 

Build Loyalty with Data

By harvesting zero party data you can deliver value to your loyalty members faster. The more value they perceive, the more they will spend and the longer they stay.

It also makes them more profitable because you don’t need to spend money on incentivising them to spend or reengage with them when they’re at risk of churn.

Engaged customers who feel understood are loyal even without a loyalty programme. If you can leverage customer data to drive your loyalty programme then your retention rates rocket and your churn rates feather.

To learn more about how you can leverage your data to create a personalised customer experience, request a demo of our omnichannel customer engagement platform with built-in CDP.

Click to download our guide to increasing eCommerce conversions and retention.

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