How Marketers Can Gather Zero-Party Data Through Promotions

Deal-based marketing has often been associated with competing for customers based on the lowest possible price point. Traditionally brands that needed to sell products or tickets in a hurry partnered with deals sites to move these items at a large discount. However, this model doesn't maximize the potential value of deal-based marketing.

During the past year, brands have been launching elaborate campaigns to get customers to willingly share information (i.e., zero-party data). Where deals used to be about competing for customers with the lowest possible prices, they're now vehicles for providing targeted value to unlock privacy-safe information.

Here’s why the value proposition of deals is transforming, how marketers can use deals to encourage customers to share valuable zero-party data, and how brands can use data to improve the customer experience, sharpen advertising and increase revenue.

Why the Value Proposition of Deals is Evolving

When many marketers think of deals, they may still think of the CPG coupons they grew up cutting out of the newspaper and taking to the supermarket or two-for-one deals in stores. The primary online reference point might be a site like Groupon, which aggregates digital deals for experiences as diverse as oil changes and local apple picking. All of these deals can drive transactions, fulfilling one obvious objective behind promotions.

However, the retailer or digital marketplace deal has a key flaw: it distances the brand providing the deal from the consumer. The consumer picks up a product or embarks on an experience without first having a direct interaction with the business providing that product or experience, eliminating a valuable opportunity for a conversation that could provide zero- or first-party data.

As privacy changes make it harder for brands — especially CPGs and other companies without direct relationships with consumers — to target marketing efforts and understand their customers, this gap between the brand and the end user is becoming more problematic. Brands need direct relationships with their customers so that they can ask directly and consensually for feedback and customer information. Deals, which often used to happen at a point of sale disconnected from the brand, are a prime opportunity to establish that connection.

How Marketers Are Using Deals to Gather Zero-Party Data

Businesses that have not historically enjoyed scalable direct relationships with their customers are embracing the need to collect zero-party data — i.e., information the customer willingly provides a business in exchange for value. But the question then becomes: What can marketers offer customers to encourage them to share their information?

To solve this equation, marketers might consider basing deals precisely on the information they want to know about their customers. For example, would it be valuable to know if your customer lives in a certain neighborhood or region? Offer promotions for customers who live in that area, ask consumers to verify their ZIP Code, and tie the promotion to the culture or characteristics of the place to which it's tied. Want to know your customer’s profession or whether they have kids? Run the same playbook, basing the deal on that information. 

What Marketers Can Accomplish With Zero-Party Data

Once marketers start using deals to collect zero-party data at scale, they can use the data to craft powerful and targeted holistic marketing strategies. In fact, a zero-party data-driven marketing strategy should be stronger than the third-party data-driven marketing of years past because it's premised on information customers willingly provide and is more accurate than probabilistic, aggregated third-party datasets.

Zero-party data can drive richer customer experiences. For example, in addition to offering deals based on customers’ professions, brands can offer targeted experiences, such as a shopping day or week in partnership with a local retailer exclusive to nurses or social workers. This goes far beyond a single deal-based transaction, extending the value of promotions to rewarding long-term relationships that drive lifetime value for the brand and can transform the customer into an advocate.

If the consumer agrees to the use of their data for targeted advertising, zero-party data deals can also sharpen a brand’s advertising program. The brand can use granular details, which are disappearing from the open web due to privacy changes, to hone creative that will speak to repeat customers. The advertiser can also use customer data to optimize advertising campaigns and drive acquisition of new customers because if campaigns prove effective with opted-in customers of certain identities, they're likely to be effective with lookalike audiences, too.

The advent of privacy changes has often been painted in apocalyptic terms, as if the end of third-party tracking will mark the demise of targeted marketing. With zero-party deals, however, marketers can discover a more direct, future-proof path to collecting accurate customer data at scale. They can then use that data to accomplish marketing’s core purpose: delighting existing customers and acquiring new ones.

Sai Koppala is the chief marketing officer at SheerID, a leading digital verification platform that instantly verifies the identity of individuals and businesses.