With cookies going stale, brands shift to zero-party data for CX improvements

The face of digital advertising is about to change forever. Already, third-party tracking cookies and similar technologies are being deprecated, with Google dropping support for tracking methods in Chrome, and Facebook laying a $10bn loss squarely at Apple’s door. Everywhere, internet users are becoming more aware of how data about themselves and their families is being leveraged by companies, seemingly without them having permission to do so.

Simultaneously, the expectations for excellence in customer experience are rising, which presents businesses with a dilemma. How can CX excellence be maintained without the information to tailor bespoke experiences for digital interactions? The answer lies in permission-based customer data, so-called zero-party data (ZPD). ZPD can be used alongside first-party data (information that customers give out for operational reasons, like address, payment preferences, etc.) not only to compensate for the loss of third-party data but to go well beyond the current levels of insights companies have into their customers. With better insights come better, more personalized customer experiences.

Source: SAP Customer Experience

This is possible because inherent in zero-party data is trust: customers exchange something (their information) in return for something from the company (access to gated content, special offers, VIP services, and so on). By proceeding based on trust, organizations can improve the breadth and depth of key information that will allow them to create a new generation of meaningful relationships. Already, some companies are ahead in creating a unified view of all their customers across multiple sub-brands. They’re using first-party data from every touchpoint to create bespoke interactions, fully compliant with local legislation (like GDPR), and with, as Forrester defined it, “data that a customer intentionally and proactively shares with a brand.” That’s zero-party data.

To achieve the transition to a cookie-less future, organizations must address their technology provisions for CIAM and CDP (customer identity and access management, customer data platforms). That may need investment in a new platform, but alongside, a change in approach to managing valuable customer data from one that passively receives information to one that proactively seeks data with customers’ explicit consent. Speaking at SAP’s Customer Experience LIVE 2021 event, Nestlé and Repsol shared their insights with attendees on this subject. By retooling and altering their data-centric approach, Nestlé was able to break down data silos and begin to create meaningful, personalized customer interactions at scale — right across multiple brands that range from child health to pet supplies and confectionery.

SAP’s Chris O’Hara said, “CIAM [is] the essential building block of a trusted relationship. Offering customers granular ability to set their consent and preferences, by channel (ECPM) – and giving them an easy way to change these, as their relationship with the brand changes – is the next level [Our italics]. Therefore, brands must start putting both CIAM and ECPM technology at the core of their CX strategy, and that is a mindset shift for most brands, who look at such technology as an ‘IT project’ rather than what it can be: a set of tools to grow zero-party data at scale to feed better customer experiences.”

Source: SAP Customer Experience

Spanish conglomerate Repsol has goals being reached with a similar realignment of attitudes and technology usage. For them, “customer centricity” means meeting the energy needs of 24 million B2B and B2C customers in nearly 100 countries. Sales teams need a continuous flow of customer data to find the best-fit offer for every user and business. But for Repsol and any other company adjusting to the new landscape, it’s not plain sailing. O’Hara points out several issues that await:

“If there is a downside to switching to an aggressive first- or zero-party data management strategy [it] is that it requires a real value exchange to obtain the data in the first place – things like offering discounts, exclusive offers, or great content for customers to trade value (their data) for yours (services, information).”

Any new approach to customer relationship management aimed at CX improvements requires a world-class CIAM platform, one that’s capable of pivoting into the new paradigm. It will need to interact with other technologies that empower ZPD, like marketing technology platforms capable of creating B2C and B2B collaborative spaces, where data interchange can occur in meaningful ways.

But, with the right solutions, permission-based customer data can be a core driver of revenue and loyalty for brands around the globe, allowing customers to cross the line willingly and proactively from customer to brand advocate.