Three major trends will affect the ROI of your marketing promotions in 2019. Here’s what’s coming—and tips for how digital marketers like you should respond to make it a banner year.
#1 What’s Out: Third-Party Data that Poses Privacy Risks
Marketers faced some big challenges in 2018, and data privacy was at the center of many of them.
Governments took action to protect consumers by creating new privacy regulations and penalizing companies that aren’t transparent with their use of data, which reduced marketers access to customer data. And high-profile data breaches continued to erode consumer trust.
It’s no wonder that in our State of Customer Acquisition Report, privacy concerns were one of the top three challenges marketers said they faced, and the greatest challenge for one in five marketers.
As we enter 2019, these issues still loom large. Consumers are a lot more savvy (and wary) about what information is being collected about them. And they quickly tire of marketing that doesn’t feel relevant to them – a significant factor when marketers rely on third-party inferred data that doesn’t always hit the mark.
What’s In: Zero-Party Data that Protects Consumer Privacy
Forrester Research defines zero-party data as “data a customer intentionally and proactively shares with your brand,” usually in exchange for some type of value.
For example, if a brand provides a gated, exclusive offer to members of a particular group, such as students or the military, the customer willingly provides information to the brand in order to access the offer. If eligible, the customer redeems the offer and their relationship with the brand deepens.
Compared to third-party data that is largely derived from inferences, algorithms and a lot of assumptions, zero-party data’s self-reported nature makes it extremely valuable.
Forrester predicts 2019 will be a year of increased consumer power that pushes marketers to acquire and use data more carefully while providing better marketing experiences for customers. How do you make the most of it?
TIP: Collect and Use Data Your Customers Willingly Provide.
When brands effectively acquire zero-party data through exclusive, special offers or discounts, privacy and personalization coexist beautifully. This kind of “consent-based marketing” reduces a brand’s privacy risk because data is willingly provided instead of harvested by a source unknown to the customer.
#2 What’s Out: Mass Discounting
In this era of growing consumer power – and consumer marketing fatigue – universal discounts only add to the noise in a marketplace that’s already overrun with messages. Universal discounts make it difficult for a brand to stand out, and when discounts apply to everyone, customers quickly become conditioned to them.
It’s a subject marketers are worried about. In our State of Customer Acquisition Report, we asked marketers to identify what prevents them from seeing higher conversion rates, and their top three responses were all symptoms of mass discounting.
- Consumer fatigue or conditioning to discounts (55%)
- Lack of differentiation (54%)
- Inability to target a specific segment (53%)
Marketers see the red flag. Sixty-five percent said they’re concerned about the long-term impact universal discounts may have on diluting a brand’s value.
What’s In: Personalized Exclusive Offers
Exclusive offers are a powerful alternative to mass discounts. More than two-thirds of Americans prefer exclusive offers over traditional coupons that aren’t specific to them.
And shoppers love them, too. Ninety-four percent would take advantage of one, and 91% would share one with friends and family.
There are plenty of good reasons for this. Unlike universal discounts, exclusive offers are targeted, allowing you to reach–and more deeply engage—customers in segments your brand values.
And when your exclusive offer is gated—meaning customers need to be verified in order to receive it–you show your customers you’re serious about both the offer and them.
TIP: Rise Above the Noise with Personalized Promotions People Want.
Bring prospects into your fold with exclusive offers, and confirm your commitment to them by providing frictionless verification process using digital verification during the purchase process.
You’ll be glad you did. Gated offers consistently deliver 3x conversion rates and 2x repeat purchases—with a return on ad spend of 20:1.
#3 What’s out: Segments
It’s tough to talk marketing without using the word “segment.” (We’re guilty as charged–see above.) It’s the language we’re used to. But even if it’s hard to change the lingo we all understand, it’s time for a mind shift away from segments. Why?
They’re impersonal. While people may belong to a segment by default, as a result of their demographic or life circumstances, nobody identifies as being part of a segment. The rising noise—created in part by the flood of impersonal marketing tactics—leaves consumers feeling overwhelmed and disconnected, and this is driving them towards brands that provide more authentic exchanges.
What’s in: Communities
Rather than thinking in terms of segments, think in terms of communities. Communities carry much richer meaning and tap into a deep sense of identity that promotes true connection. But how do you identify a community?
Think of it like this: a community is a group of people who strongly identify with a specific characteristic. It could be their:
- Occupation (teachers).
- Lifestage (students or seniors).
- Part-time work (Uber drivers).
- Deep commitment to their country (the military).
It could even be an organization they belong to and value, such as the Sierra Club or AARP.
There are all sorts of different communities. The key is finding something that is core to a person’s identity and having it be a big enough group to warrant directing marketing dollars to.
TIP: Market to Communities to Acquire Customers and Drive Loyalty
When you create an exclusive offer for a particular occupation, life stage or set of values, your customers feel honored for that part of their identity. This sparks a meaningful connection you can nurture with additional programs, turning new customers into brand advocates.
The first step to successfully marketing with a community mindset is identifying the high-value communities for your brand. Here are three communities that many brands can easily find in their audience.
Discounts for the military community have strong appeal–95% of military members say they’re more likely to shop at a company that offers one. Brands like T-Mobile, UNTUCKit and Lowe’s have used their military discounts to break through a noisy marketplace, acquire new customers and deepen their engagement in a way that builds loyalty.
Most teachers experience their profession as a calling, and they shop as if it is. Seventy-one percent spent more than $500 of their own money on classroom supplies. Brands like Target that provide exclusive offers to teachers are giving something back to people who already give so much, and it builds loyalty. According to our teacher survey, 88% of teachers said they actively search for companies that offer a teacher discount, and 83% said they’d choose a retailer that offered one over a competitor that didn’t.
Even if college students identify more tribally with their specific school, they still strongly recognize their student status makes them unique. They’re also always looking for deals, and an exclusive offer can provide long-term dividends. According to Deloitte, the customer lifecycle for college students is 10 years. Nurturing their loyalty while they’re in school keeps them connected to your brand when they graduate.
Implement These Tips for a Great 2019
By bringing in zero-party data, supporting exclusive offers and tapping into the power of communities, gated offers provide a perfect way to enhance and build upon these forward-thinking strategies to deliver results and delight customers.
Want to learn more about how gated offers can drive your customer acquisition on 2019? Download The Definitive Guide to Gated Offers, or contact SheerID to learn more.