May 27, 2021
Value Exchange: Key to Brands Building First-Party Data
The impending shift from third-party, cookie-based digital targeting and tracking is accelerating the need for brands to collect first-party data to use as an alternate method of reaching customers and prospects in the future. Consumer privacy concerns are making it harder to collect first-party data as more consumers are weighing the pros and cons of giving brands access to their personal information.
The exchange of consumer personal information with a brand is not impossible. But it does require a carefully crafted strategy where a brand provides value to the consumer in exchange for their personal information – known as a value exchange. Brands receive customer-rich data and consumers receive richer experiences in the hope of future transactions or sales. Successful value exchange relationships with customers can increase brand engagement and connection and can lead to longer lasting engagement and affinity – ultimately increasing overall customer lifetime value and ROI.
What Does It Mean?
Creating a value exchange with your customers means knowing who they are and what they need from you as a brand. Brand value can be anything from education to community to humor, and each brand will be unique in how it adds value to consumers’ lives. Here are some key principles to remember when determining the value exchange for your brand:
CREATING THE VALUE EXCHANGE
- Engage people as individuals
- Engage people on what they do
- Engage people continuously over time
- Engage people toward an outcome
- Engage people everywhere with tailored platform messaging
Providing consumer value does not have to be complex or elaborate – small, simple personalized messages can go a long way with your customer base. Personalization does not have to be one-to-one but can be in aggregate based on differentiated behaviors or needs.
What Should Marketers Be Doing?
Marketers should start the collection of first-party data by mapping out the consumer journey, then overlaying consumer needs and wants along that path. The intersection of what your brand can provide and what consumers need or want should be your value exchange for a consumer’s first-party information. It should be unique to your brand and something that differentiates you within your category.
Each brand’s consumer value should be clearly represented within any communication leading to a first-party data capture, as well as subsequent communications within the nurture stream. Be sure to set up data and analytics on each consumer touchpoint or segment, so that you can measure and adjust messaging based on behavior. Measurement and tracking will allow brands to learn how to keep consumers engaged over long periods of time as needs may change throughout the consumer lifecycle.
For brands without existing data on consumer needs and wants, research can be helpful to better understand your customers. The other option is make assumptions or inferences and test, learn and measure different value propositions until you zero in on the most effective approach.