Why Age-Old Discounting Is The New Frontier In ‘Personalized’ Marketing

If you’re a marketer, you are certainly familiar with the term “zero-party data.” There’s plenty of debate about what it is and how marketers can use it to attract, convert, and retain customers. But one thing everyone agrees on is that marketers must figure out how to collect valuable, personal information from consumers in a way that does not set off privacy red flags or require the use of third-party cookies.

Indeed, privacy concerns among consumers aren't abating. According to a recent Prosper Insights & Analytics survey, two thirds of consumer respondents would like to see legislation enacted to prevent social media sites, search engines, and mobile apps from selling their personal, online, and mobile location data to advertisers and others. Here’s my recent discussion on the topic of zero-party data and personalization with Jake Weatherly, the CEO of SheerID, a company that is on the forefront of helping brands use zero-party data to personalize their marketing strategy in a way that embraces consumer privacy.

Gary Drenik: Can you give me an overview of what SheerID does? And why do you believe product discounts represent a new frontier in personalization?

Jake Weatherly: Let me start with the question that all marketers are asking themselves: how can I get the attention of consumers in a world wherein they receive, on average, 5000 messages per day? Consumers are more inundated with messages than ever. For example, according to a recent Prosper Insights & Analytics survey, nearly half of us regularly watch TV while we’re online. The best way to engage consumers in such a noisy environment is through personalization - by appealing to the specific wants and needs of each individual.

But, before you can do that, you need to understand who these people are. The questions to ask and answer center on identity. The way we help brands embrace this new reality is by verifying the identity of shoppers. Everyone wants to activate an offer made available to them. Members of particular communities, such as students, teachers, nurses, or military service members are the key to success for this next generation of marketing leaders and brands.

Brands like ASICS, Target, and Spotify use our software platform to verify that the data that consumers volunteer about themselves to qualify for a deal - such as the school where they teach or the union they belong to - is accurate. Inviting consumers to willingly provide data about themselves - in this case, in exchange for a valuable discount - means brands acquire new customers and cultivate recognition with highly coveted consumer communities.

Drenik: That all makes sense. But can you provide an example of a company that is putting this approach into practice?

Weatherly: Sean Condon, who oversees ASICS direct to consumer marketing, has found, like many other marketers, that restrictions on data have made it increasingly difficult to gather information about consumers.

Sean and his team have found that consumers are willing to provide personal information about themselves if the brand is completely transparent about how the data will be used to deliver a valuable experience in return.

ASICS’ OneASICS loyalty program has been wildly successful in large part due to the deals that the company offers to specific consumer communities based on how people identify themselves – their membership to specific groups such as first responders and military. In just 25 days, ASICS’ loyalty program campaign drove 26,000 purchases and 15% of total sales for the month. SheerID digitally verifies these consumers, which makes it easy for shoppers to self-identify as members of the targeted community and redeem their discount. This verified data allows ASICS to further personalize experiences, build trust, and reach new customers.

Drenik: It stands to reason that retailers would be trailblazers in the area of zero-party data. But do you think there’s also an opportunity for companies from other industries?

Weatherly: We work with many services companies that focus on subscriptions. For example, Comcast recognized that it was falling behind competitors in its efforts to engage with the next generation of customers.

Part of Comcast’s success can be attributed to establishing partnerships with HBO and Amazon Music in order to give Gen-Z’ers the streaming media they craved. But it wasn’t just what Comcast began offering, it was also how they began offering it.

In order to attract budget-conscious Gen-Z’ers, Comcast provided a student discount on a package that included their high-speed Internet as well as content from HBO and Amazon Music. Students simply visited Comcast’s landing page and entered basic information, such as their email address and the college they attend. SheerID instantly verified their eligibility, and students subscribed without ever leaving Comcast’s website.

The offer was so popular that it drove a mind-blowing increase of 6x growth in subscriptions year-over-year. Moreover, Comcast now has new customers and verified data that they incorporate into their ever-evolving marketing mix.

Drenik: I understand that consumers are happy to provide their data to get a discount on products or services provided by your customers. Are there ways that brands can use this zero-party data as part of their ongoing marketing efforts?

Weatherly: Absolutely. Imagine for a moment that a home improvement store brand offers discounts to military personnel via campaigns similar to the one Comcast runs for students.

After a member of the military provides information about herself to qualify for the offer, the brand appends this data to her customer record. A few months later, the brand might email her thanking her for her service with an offer for a free product redeemable only in-store. Once she visits the store to pick up the free product, there’s a good chance that her transaction will be magnitudes larger.

Zero-party data deals can also sharpen a brand’s equity and recognition. The brand can use granular details, which are disappearing from the open web due to privacy changes, to hone creative that will speak to return customers.

Drenik: Changing gears, I understand that you commissioned a survey from Forrester Consulting earlier this year that addressed the opportunities and challenges marketers are facing with zero-party data. What was the biggest takeaway/surprise for you?

Weatherly: According to the study, 90% of marketers surveyed say their firms will capture zero-party data within 12 months, while 85% stated that zero-party data is critical to creating effective personalized experiences. However, while almost as many respondents said they have access to zero-party data (82%), 42% admitted they don’t know how to use it effectively.

There are so many unknowns with zero-party data, including how to responsibly ask consumers for their information, how to know if data provided is accurate, and how and when to use this sensitive information. This is where vendors in our space can help. In addition to what we do at SheerID, there are vendors that provide so many ways to incentivize consumers to confidently and securely offer their data. For instance, there are a number of companies that make it easy for brands to understand special interests or gather unique preferences on their websites.

Looking at the bigger picture, the question all successful marketers are asking is, “what inspires consumers to share their data with me?” With exciting, valuable, and authentic incentives in place, the winning brands continue to put themselves in an excellent position to capture invaluable zero-party data and use it to engage with consumers in the most important and valuable way - Invited Personalization.

Drenik: Thanks Jake, for your thoughts on how marketers should reimagine personalization and discounting to acquire and retain customers. Given today’s economy, this is more important than ever.