Managing Customer Data: Creating Loyal Advocates Through Data Personalization
August 29, 2023
As a business owner or marketing professional, understanding data personalization can be your key to unlocking customer loyalty and retention and sculpting brand advocate - your highest order of cult-worthy customers. Data personalization refers to the process of collating and leveraging audience and data analytics to meet the individual needs of each of your consumers.
The process of data personalization process allows businesses to create an experience that is tailored specifically towards each customer segment, making all users feel valued and appreciated.
Additionally, zero-party data can offer other solutions such as personalized recommendations based on previous purchases or uncovering customer preferences, thus driving targeted sales and seamless customer experiences.
In this blog post, we will discuss what data personalization means, how data and brand personalization can assist with manifesting loyalty and retention in your customers, and other solutions that zero-party data can offer your business.
Understanding data and personalization
Zero-party data and first-party data collection are two important concepts in the world of customer personalization.
Zero-party data, a term coined by Forrester research, is information that customers voluntarily share with organizations, such as preferences, purchase intentions, and how they want to be recognized by a brand. This type of data is often collected through quizzes, polls, surveys, or other forms of direct engagement with customers.
On the other hand, first-party data is information that companies collect from their own sources such as website visits or customer service interactions. Companies collect first-party data when they collect information directly from customers through their interactions with a website or app. This includes tracking user behavior on a website or app, collecting demographic information such as age and gender, and using cookies for targeted advertising.
Both zero-party and first-party data can provide valuable customer insights that help businesses better understand their customers’ needs and preferences. Therefore, collecting this type of data helps business owners and marketers segment their audience into different categories based on their specific demographics and self-reported qualities. In turn, this drives more lucid marketing insights.
In turn, having access to this type of information allows companies to create highly personalized marketing campaigns for their customers. Marketers can also use it to better understand customer behavior and preferences so they can tailor their products and services accordingly. Additionally, collecting zero-party data helps build trust between customers and brands because customers feel like their input is valued and appreciated.
Zero- and first-party data collection is essential for any company looking to create a successful personalized experience for its customers. By understanding customer preferences and behaviors through these types of data collection methods, businesses can create more meaningful relationships with their customers which will ultimately lead to increased loyalty and sales. However, bear in mind that companies should take into account privacy regulations for both their industry and business location when collecting this type of data in order to protect customer privacy rights - and therefore prevent any liability on part of their company.
Understanding Brand Loyalty and Retention
Customer loyalty and retention are two of the most important elements of any successful online business. Investing in customer loyalty and retention pays off, too; CX drives over ⅔ of customer loyalty for brands, outperforming brand perception and price combined. (Source)
Customer loyalty refers to the measure of how satisfied a customer is with their experience and how likely they would be to purchase from you again. Some brands define achieving utmost customer loyalty as converting customers into brand "advocates". Customer loyalty can be fostered by evoking feelings in customers such as satisfaction with their purchase, validation of their wisdom, among many others.
Customer retention, on the other hand, measures whether an existing customer continues to use your products or services over a given period of time.
It's essential for online companies to invest in customer loyalty and retention efforts as neglecting these can lead to a significant dip in return on marketing investment (ROMI).
Focusing on customer experience (CX) is one of the best ways to ensure that customers remain loyal and keep coming back for more.
Research by Gartner, as demonstrated in their whitepaper "Creating a High-Impact Customer Experience Strategy" shows that customers who feel a product has noticeably improved their work (or even their life), made them worry less, and gave them confidence in reaching their goals tend to be more loyal. Customer loyalty will likely fall when customers lose confidence in their choice to purchase your product, or worry more because of purchasing your product.
Ultimately, the most powerful "loyalty trigger" CX projects should target when optimizing customers’ experiences is validation that their choice of purchasing your product was a wise decision. If you make customers feel - time and time again - as though they’ve made the right choice by purchasing your product, this will be a key engine for driving customer loyalty.
What is a brand advocate?
A brand advocate is a customer loyalty term. Brand advocacy refers to a customer who promotes a company or brand through word-of-mouth marketing due to having an exceptional experience with that brand.
Brand advocates are typically customers or employees of the business and share positive reviews about the product or service. Brand advocates help to increase brand awareness, sales, and customer loyalty by providing honest feedback and recommendations to their networks.
Brand advocacy can be an effective form of modern business marketing because it relies on trust and relationships between people. People are more likely to believe in a product if they hear it from someone they know and trust, rather than from an advertisement. Brand advocates also provide valuable insights into what customers think of the product or service, which can help companies improve their offerings.
Brand advocacy is not only beneficial for businesses but also for the advocates themselves. If a company rewards loyalty, advocates often receive rewards such as discounts, free products, or exclusive access in exchange for their efforts. This encourages them to continue promoting the brand and helps build long-term relationships between the company and its customers.
In order to make sure that your brand advocacy efforts are successful, it’s important to create a loyalty and retention strategy that takes into account your goals, zero- and first-party audience metrics, and budget. You should focus on building relationships with your advocates so that they feel valued and appreciated for their efforts.
What types of data are companies allowed to collect?
The types of online data companies are able to collect and how companies leverage and manage customer data varies greatly depending on a business’s particular industry and location.
For example, e-commerce businesses may track customer purchases, website visits, search queries, and other activities related to their products or services.
Social media companies may collect user profiles, posts, likes, comments, and other interactions with their platform. Other types of businesses such as banks or healthcare providers may collect financial or medical records from customers.
When it comes to regulations and privacy rights surrounding online data collection, there are several laws in place that protect consumers’ privacy rights. The Federal Trade Commission (FTC) is responsible for enforcing the Children’s Online Privacy Protection Act (COPPA), which mandates that websites procure parental permission before accumulating any personal data from kids below the age of 13.
The FTC also enforces the Fair Credit Reporting Act (FCRA), which requires companies who use consumer reports for employment purposes to provide a copy of the report and a summary of consumer rights before taking any adverse action against an applicant based on its contents.
In Europe, the General Data Protection Regulation (GDPR) provides individuals with greater control over how their personal data is collected and used by organizations. It requires organizations to obtain explicit consent from users before collecting any personal data and gives users the right to request access or deletion of their personal information at any time.
Overall, online data is a valuable asset for businesses but must be handled responsibly in order to protect consumers’ privacy rights. Companies should ensure they are compliant with all applicable laws when collecting and using customer information and should take steps to ensure customer data is secure at all times.
How Can I Capture and Manage Personalized Customer Data?
Capturing personalized customer data - and then properly managing customer data - is essential for companies to provide a tailored experience to their customers.Audience.io is the world's leading zero-party data platform that helps businesses capture, store, and activate customer data in order to create personalized experiences.
Audience.io offers a suite of tools to help companies collect customer data throughout the customer lifecycle such as website activity, signup forms, sweepstakes, contest tools, types of giveaway builders, polls, banners, and more. This allows them to gain insights into customer preferences and behaviors which can then be used to create more personalized experiences with customers, target customers more directly, and ultimately increase ROI.
In addition, Audience.io also provides advanced customer profile-building capabilities that allow companies to segment their audience members, then measure the efficacy of campaigns and data-collection efforts in real-time, making adjustments accordingly. This ensures that they are able to maximize the effectiveness of their personalization efforts and customer data management while also staying compliant with privacy regulations such as GDPR and CCPA.
Audience.io is an invaluable tool for businesses looking to capture personalized, zero-party data in order to offer a more engaging experience for their customers. With its suite of features and advanced analytics capabilities, you can manage customer data effectively. In short, it’s the perfect solution for any company looking to take their personalization efforts to the next level.
Tangible Loyalty Tactics to Leverage & Manage Customer Data
It’s entirely possible to collect incredibly valuable and insightful data from your customers to foster brand advocacy - without infringing on customers’ privacy rights.
But collecting the proper customer data is only half your battle. Now, you’ve got to manage your customer data and apply it to your online product to improve your customer experience (CX).
First, let’s cover the types of customer experiences most likely to impact loyalty and retention, which are called salient experiences. According to Gartner’s research, Salient experiences can be broken into four primary categories:
A company's interaction experience - what it does and how customers feel when interacting with them - is determined by customer evaluations of effort, convenience, personalization, uniqueness, and in-experience learning. Together these criteria form a highly specialized impression for customers that directly impact their relationship with the business. According to Gartner for Marketers, a company’s interaction experience is highly important to prioritize up to a certain point. After this point, the company may experience diminishing returns in its efforts to improve or personalize interaction experiences.
Product experience speaks volumes about how customers perceive your brand. It encompasses product utility, usability, customer needs alignment and life enrichment - all of which constitute to how people feel after using the company's goods or services. In other words: what they do with it, as well as their attitudes towards the whole process. According to Gartner for Marketers, a company’s product experience is most important when trying to foster brand loyalty. So, leveraging zero-party data insights to improve your product experience will, according to some research, be the most effective place to apply your data insights.
Brand perception is a measure of how customers view the company's standing in its industry and whether it aligns with their values, while price reflects their opinion on if they're getting good value for what they pay. Brand perception is another worthwhile focus for managing customer data and leveraging it in customers’ touchpoints with your brand.
Price experience. In short, does the product offer good value for what the customer pays? How can you make the customer feel as though they’ve made a good, worthwhile purchase by becoming your customer?
By optimizing these types of experiences using your zero-party data, you can create loyal customers and - ideally - brand advocates.
3 Steps to Creating a Customer Experience (CX) through Data Personalization
According to Gartner, there are three steps that will help you foster loyalty by personalizing your customer experience and managing customer data:
First, create a customer experience strategy based on salience. Identify and prioritize the experiences that have the greatest impact on your customers’ loyalty. Improve touchpoints to make them more memorable, which in turn will increase efficiency by reducing unnecessary customer issues. With this approach you can guarantee greater ROI from your CX initiatives.
Second, take note of (and take advantage of) chances to make customers feel content with their selection. Design touchpoints that reduce the likelihood that they will weigh up other alternatives by allowing them to be pleased with their initial decision.
Third, to scale innovation, you must develop and apply sustainable practices. A systematic approach for recognizing opportunities, generating solutions, classifying projects, constructing and testing new experiences. This process will be essential to your success.
Managing Customer Data Tactic 1: Surveys & Polls
Now, let’s outline a tangible example for how to leverage and apply zero-party data. To do this, we’ll investigate one of the numerous applications to improve interaction, product, and brand experience with zero-party data: surveys and polls.
Developing concise, insightful surveys at key user touchpoints - such as at signup or “checkout” - is an effective approach to using zero-party data instantly. Inserting a survey or poll in one or multiple parts of your users’ journeys will allow customers to provide feedback on their experiences with the company's products or services while also providing valuable insights into their preferences.
Utilizing personalization technology along with real-time interaction management will enable you to promptly customize individuals' experiences based on what they offer you as information.
Managing Customer Data Tactic 2: Preference Centers
Companies can also use preference centers to give customers control over what kind of communications they receive from the business. This allows customers to opt-in or out of certain types of emails or notifications while still providing companies with useful information about their interests.
By allowing customers to customize their preferences, companies can provide a more personalized and tailored experience that meets the individual needs of each customer. Here are some examples of how you can allow customers to take control of their experience.
Recommendations and notifications: An online retailer could offer customers the ability to set preferences for product recommendations and notifications. This would allow customers to choose what types of products they would like to be notified about, as well as receive tailored product recommendations based on their interests.
Customized communication channels: Customers could also set preferences for communication channels such as email or text message, so that they can receive notifications in the format that works best for them.
Subscription-based pricing model and services: Subscription-based service that allows customers to set preferences for how often they receive shipments. This gives customers the flexibility to adjust their subscriptions according to their needs and lifestyle. Customers can also customize what type of products they receive in each shipment and how often they want them delivered.
By providing this level of personalization, companies can create an engaging and satisfying customer experience that keeps them coming back time after time.
Managing Customer Data: Loyalty Programs
Finally, loyalty programs are another great way for companies to collect and leverage zero-party data while rewarding customers for their loyalty at the same time. By investing in customer loyalty and retention efforts, businesses can ensure that their customers remain engaged and continue to make repeat purchases.
Businesses in all industries benefit from utilizing zero-party data. For example, fashion retailers may administer surveys to learn more about shoppers' style interests and then suggest items that are most likely to appeal to them, thereby promoting conversions.
Overall, collecting personalized zero-party data is an important part of any successful marketing strategy. By using methods such as surveys, polls, quizzes, preference centers, and loyalty programs companies can capture this valuable customer information without infringing on privacy rights or breaking any laws or regulations.
For example, offering discounts or rewards points for repeat purchases can encourage customers to come back again and again. Additionally, providing personalized experiences such as tailored emails or product recommendations based on past purchases can help create deeper connections with customers.
It's integral for online companies to invest in loyalty and retention efforts if they want to maximize their ROMI. Focusing on creating an exceptional customer experience through personalized offerings and rewards programs will help ensure that customers remain loyal and keep coming back for more.
Eliminating Silos to Integrate Insights
Zero-party data platforms, such as Audience.io, can help to eliminate data silos and integrate valuable audience and customer insights. By leveraging zero-party data, companies can collect information that customers intentionally and proactively share with them. This includes preference center data, purchase intentions, lifestyle information, and more. With this data in hand, businesses can gain a better understanding of their customers' wants and needs.
Integrating zero-party data with customer data platforms (CDPs) can be highly effective in providing businesses with a comprehensive view of their customers. CDPs enable companies to gather all the available customer data from different sources into one platform for easy access and analysis. This helps to create a unified view of the customer journey across multiple channels while eliminating any silos that may have existed before.
By combining zero-party data with other types of customer insights, companies can gain deeper insights into their audiences and better tailor their marketing strategies accordingly. This allows them to create more personalized experiences for their customers while also increasing creative customer engagement ideas and loyalty over time..
Enhancing the customer experience via zero-party data
Zero-party data platforms such as Audience.io are an effective way to foster customer loyalty and advocacy. By leveraging zero-party data, businesses can gain valuable insights into their customers' preferences and intentions, enabling them to provide more personalized experiences that meet their needs. This helps to build trust between the business and its customers, resulting in improved customer satisfaction and loyalty.
With Audience.io, businesses can easily collect, manage, and analyze zero-party data to enhance the customer experience and drive long-term success. To learn more about how Audience.io can help your business leverage zero-party data for better customer engagement, click here.