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Why Data Derived From Customer Loyalty Is Critical Beyond the Cookie

With the death of the cookies, the ‘value exchange’ between businesses and their customers’ willingness to share personal data has never been so important. Activating cookie-less data, using it to enhance customer experience and derive insights is a craft and skill that marketers need to invest in and develop. 

Marketers agree they need to survive, lead and stay relevant in a cookie-less society – a reality that is right around the corner. Leading with loyalty and adopting a Zero Party Data strategy will help marketers survive by creating long-lasting customer relationships with a clear and concise value exchange. 

It’s time for a new marketing recipe.

How Will Life Change for Marketers?

It’s a stressful time for marketers. Many believe that their lives will be disrupted to the “nth” degree without cookies. However, a quote from Tim Cook, the CEO of Apple, gives reprieve to that stress and shows there will be life after the death of cookies:

“Technology does not need vast troves of personal data, stitched together across dozens of websites and apps, in order to succeed. Advertising existed and thrived for decades without it. And, we’re here today because the path of least resistance is rarely the path of wisdom. If a business is built on misleading users, on data exploitation, on choices that are no choices at all, then it does not deserve our praise. It deserves reform.”

This reform to digital marketing, which is leading to the death of the cookie, is based on international regulations. The General Data Protection Regulation (GDPR) is a regulation on data protection and privacy in the European Union. This model is being adopted for the APAC region which will disintegrate the use of cookies in digital marketing. 

Brands, publishers, and big tech could face legal ramifications, potential class actions, and regulatory penalties for breaking GDPR. Firms will no longer be able to assume that if they cannot identify someone through their IP address, for example, that the Privacy Act does not apply to them. Under lawmakers’ proposals, it will. 

Challenges, Opportunities and Saying No to ‘Renting’ Data

But, there is life after the death of the cookie. Zero-party data can help marketers connect with their customers. This preference data comes directly from the consumer. There are no intermediaries and no guesswork — it’s psychographic data that includes the customers’ values, attitudes, interests, and personality traits.

Recommended Article: Cheetah Digital Study Finds Consumers Uncomfortable With Cookie-Fueled Ads

Lauren Solomon, CEO, Consumer Policy Research Centre notes how data processes are clunky and outdated. 

“Our research shows that 70 percent of consumers accept [consent] terms, even if they are not comfortable with them. When we ask them why, three-quarters say it’s because it’s the only way to access the product. There isn’t actually any way for consumers to express the preferences that they have and to acquire products that meet those preferences – because it’s a take it or leave it proposition.”

“More than 90 percent of Australian consumers are uncomfortable with how their data is collected and shared, and they’re disempowered to do anything about it. They want the government to intervene and protect them,” Lauren says. 

Consumers are more protective of their personal data than ever. In the Australian Community Attitudes to Privacy Survey 2020, 7 in 10 respondents nominated privacy as a major concern for them, whilst 87% wanted more control and choice over the collection and use of their personal information. 

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So what is the solution? Companies need to stop renting data and build their own database through direct-to-consumer relationships. The key to future success is building a loyalty initiative that offers mutual value exchange. Customers can willingly offer their personal details, in exchange for a better customer experience. 

Why Customer Loyalty?

Loyalty nowadays has become a multifaceted tool. It helps bring customers back to a brand and simultaneously helps brands understand their customers. 

Customer loyalty began as a simple token program in the 1700s in the United States. American retailers began to give customers copper tokens with purchases that could be later redeemed on future purchases. 

In the 1800s, UK company Green Shield awarded stamps for purchases at select retailers that could be later redeemed for catalog products. Fast forward 200 years and loyalty programs have evolved from the run-of-the-mill stamp card to sophisticated programs benefiting both retailers and customers. 

The objective of customer loyalty programs has historically been to create levers that marketers can pull to incentivize desired behaviors among consumers; namely, to increase basket size or reduce the time between transactions. But now, they are so much more than that. Loyalty programs aren’t just about offering discounts and vouchers to members; they’re an extension of the brand and provide an ‘experience’ beyond the product or service that retains customers. 

But what makes a great loyalty program? Adam Posner, CEO and Founder of The Point of Loyalty, shares the seven zones that make up the “wheel of loyalty fortune”. Organizations need to implement each one of these points to ensure they have a strong, steadfast loyalty program that will benefit both customers and brands. 

  1. Business: First and foremost a business must be profitable and sustainable
  2. Members: Organisations should understand their loyalty member’s behaviors, beliefs and belongings
  3. Program: The loyalty program needs to be meaningful and desirable to consumers 
  4. Team: The organization’s employees need to buy-in for the loyalty program and be willing to endorse it
  5. Technology: The technology should be fit-for-future rather than fit-for-now 
  6. Data: Ensuring the loyalty program captures the data necessary for analysis and for relevant action 
  7. Dialogue: Any company dialogue to the customer needs to be dynamic and personal at all times

Vans – A Multifaceted Loyalty Program

The iconic skate brand Vans is an example of an evolved loyalty program. This year the company launched a mobile-first loyalty program rewarding customers for engaging with the brand via social media. For over 50 years, Vans has been delivering skate shoes and apparel that reflect the individual personality and style of fashionable youth.

The Vans loyalty program delivers added value to customers and, in turn, allows Vans to develop a deeper understanding of their customers. This symbiotic relationship has created better experiences for customers while growing to 12 million members in just 2 years. Nearly 50% of all direct-to-consumer (DTC) revenue comes from their loyalty members, and Vans sees significantly higher spend from loyalty members vs. non-members.

Loyalty data has helped Vans in five ways:

  1. Identification: Being able to identify customers across devices and channels
  2. Insight: Learn more about what customers love to do
  3. Personalization: Help create messaging that resonates with customers and therefore drives trust and data enrichment
  4. Preference: Understand and activate the relevant brand message on customers’ preferred channel
  5. Attribution: Measure the results of marketing campaigns

Unlocking the Value of Loyalty in a Cookieless Future

The importance of loyalty programs should not be overlooked as a critical part of a marketer’s toolkit. Loyalty programs are the perfect replacement for connecting customers with brands in new and innovative ways now and beyond a cookie-less world. They give organizations a clear, zero-party data approach to unlock deeper insights into their customers, unlock fresh CX opportunities, and open powerful new ways to forge more long-lasting and meaningful customer relationships.

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