One of the biggest challenges of creating meaningful, long-term relationships with consumers is learning how to build trust. Brands who lack transparency about their production processes, marketing campaigns, privacy policies, and so on risk losing their audience and damaging their reputation. In fact, over 71% of consumers “switched brands at least once during the past year”, with 88% of them finding trust even more important now than ever. If companies are looking to turn first-time shoppers into loyal advocates, they need to focus on fostering trust - and one of the best ways to do so is through the fair and ethical use of consumer information. What are the most effective strategies for brands to build trust using first-party data?

What is data-driven marketing?

Data-driven marketing consists of business decisions and marketing strategies informed by company, competitor, and consumer data. This can include business performance, industry trends, user demographics, and purchase behavior. Rather than basing their efforts on assumptions and theories, data helps brands and marketers make clear connections between their decisions and their outcomes.

When leveraged correctly, data should be present in every stage of the decision-making process. Whether companies are running a social media campaign or a paid search campaign, sending out emails or physical mail, or connecting with consumers on a one-to-one basis, data must play a significant role in every aspect of marketing. According to Forbes, companies who adopt data-driven practices are six times more likely to be profitable year-over-year compared to those who don’t.

Benefits of data-driven marketing

The main advantage of data-driven marketing is its timeliness, relevance, and accuracy. Marketers can directly correlate between different data points to make better decisions, such as looking at purchase data to see which products are selling well or looking at email open rates to determine which subject lines are most effective. Data also acts as direct feedback, reducing the risk of assumptions and mistakes. For example, they can adjust their current ad campaigns based on past performance of their best-performing ads.

The other main advantage of data-driven marketing is its ability to support segmentation and personalization efforts, leading to long-term customer loyalty. Rather than looking at their consumers as a collective whole, brands can segment users by shared similarities such as their location, age group, and preferred retailers, then create targeted messaging, email campaigns, social posts, and so on. Today’s customers are more likely to engage with companies who recognize and reward their individual interests and needs than those who don’t. Data helps brands build trusting relationships with consumers and guide them along their respective paths to purchase.

Comparing the different types of data

There are four main types of data: zero-party, first-party, second-party, and third-party data. Each type of data has its unique characteristics, advantages, and disadvantages, and differ based on how and why they’re collected.

Zero-party data is information provided directly and intentionally by a brand’s consumers. This includes survey and poll responses, product reviews, social media comments, and preference center data. Consumers give this information on a voluntary basis because they want brands to better understand and fulfill their needs.
First-party data is information provided directly by a brand’s consumers. This includes contact details, purchase history, and customer service interactions. Consumers give this information on a mandatory basis because it’s necessary for engaging with a brand’s products and services.
Second-party data is information purchased from a brand’s trusted partners, i.e. other organizations. Second-party data is essentially another business’s first-party data; partners sell this information on a voluntary basis because it’s mutually beneficial for both companies, especially in the initial stages of building a brand partnership.
Third-party data is information purchased from outside sources that aren’t directly related to a brand or its consumers. This includes user feedback, website and app interactions, and focus group responses. External sources like data marketplaces and DaaS (data-as-a-service) organizations sell this information to inform decisions across entire industries.

The importance of zero-party and first-party data

In order to win consumer trust, brands should eliminate the collection and use of second-party and third-party data, as customers, governments, and regulatory organizations are becoming increasingly concerned about data ownership and privacy. People are especially wary of companies having access to personal information that they didn’t directly, knowingly, and willingly provide.

As a result, governments around the world are developing legislation like the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) to protect user data and prioritize transparency, confidentiality, and accountability. By using data purchased from other organizations, brands risk violating these laws; companies like Google and Amazon have already faced fines for breaching GDPR policies.

With zero-party and first-party data, brands directly capture information from their consumers without external influences and legal or ethical risks. They build trust by explicitly stating how they intend to collect and use customer data, such as collecting contact information to send email campaigns and SMS messages, or creating preference centers to curate the kinds of content people receive. Eventually, consumers may feel comfortable sharing more interest-based data over time in exchange for personalized brand experiences. Around 92% of the world’s leading marketers “believe using first-party data to continuously build an understanding of what people want is critical to growth”.

Data-driven marketing best practices

Create and communicate data protection policies

The first - and best - step to building trust with data is to create and enforce company-wide data protection and user privacy policies, based on the relevant legislation. This can include the elimination of third-party cookies, the inclusion of two-factor authentication, and the creation of protocols for storing sensitive data and handling security breaches. Brands should practice data mapping by outlining how and why consumer information is being collected, shared, and used.

Companies also need to communicate their commitment to user privacy in order to establish their reputation as a trustworthy brand. About 76% of companies with strong privacy policies “see increased loyalty and trust from their customers”, but only when consumers know about it. In addition to having a dedicated policy page on their website, brands can include double opt-in and preference centers so users know they have their best interests in mind. Marketers can inform consumers about policy changes through emails and social posts. People are also more likely to trust brands who are open about hacks and security breaches than those who aren’t.

Incorporate consumer privacy and preferences by design

Naturally, as data should be present in every step of a brand’s decision-making process, data privacy policies need to be present in every stage of a consumer’s path to purchase. Whether consumers are visiting a brand’s website, checking out their social media, making a purchase, or joining their loyalty program, companies should create touchpoints focused on relevancy, context, and transparency.

For example, if a brand wants more newsletter subscribers, they can add a pop-up and a registration form on their website, create a dedicated landing page and share it on social media or through paid ads, and gauge interest as consumers complete a physical or online purchase. No matter the touchpoint, brands should always clearly state why they want users’ email addresses, what kinds of content they’ll receive, whether their information will be used or shared elsewhere, and how they can update their subscription preferences or unsubscribe entirely.

Outline brand values and competitive advantages

While much of business and marketing focuses on quantitative data, such as conversions, sales, and revenue, companies should also look to qualitative data to effectively build consumer trust. Information gathering tactics like surveys, focus groups, and social listening help businesses get a better understanding of what consumers think of their brand and their competitors, as well as who they are and what they’re looking for.

For example, instead of solely looking at sales data to determine their most popular products, they can create surveys asking people what they like about specific products and what can be improved. They can then use the responses to design marketing campaigns that highlight their best qualities while also using consumer feedback to strengthen their products and strategies. Brands need qualitative data to build consumer trust, inform their decisions, and elevate their competitive advantage and unique value proposition.

Prioritize mutually beneficial relationships and information

According to a McKinsey & Company survey, about half of North American consumers are more likely to trust companies that limit the amount of personal information they ask for, as it “signal[s] to consumers that [they are] taking a thoughtful approach to data management”. In other words, customers don’t want brands to have their phone number if they don’t plan to call, or ask for their home address if they don’t intend to send physical mail. Instead, they trust brands who ask for their email address so they can send purchase confirmations and marketing campaigns, or their city so they can offer relevant content based on topics like national holidays and current events. Marketers should only ask for information relevant to their products and services, such as their consumers’ preferred retailers or features, not extraneous details like their family or career.

Consumers also trust brands who actively pursue deeper relationships with them through data over those who only passively collect data like website clicks and browsing history. While customers might not provide extra information upfront, they may respond to progressive profiling practices where brands slowly ask for more personal details over time, strengthening their understanding of them as individual consumers. For example, a book retailer can ask consumers what authors they like, while a clothing brand might ask shoppers what accessories they wear. They can then turn this data into actionable insights through targeted messaging, personalized recommendations, and segmented campaigns. When consumers see how brands put their data in action, up to 90% become more willing to provide it.

Data-driven marketing strategies for building trust

Contests and gift with purchase programs

Contest marketing is an effective way of nurturing brand awareness and capturing data about potential prospects and new consumers at the same time. In contests, sweepstakes, and giveaways, customers typically provide basic contact information such as their name and email address to win something or get the chance to win something. Brands may also ask for additional information, such as poll or survey responses, short essays, or photos and videos, as part of their contest entry. Similarly, in gift with purchase programs, consumers usually provide basic contact information and purchase data, such as what they purchased and where they purchased it from, in exchange for a reward.

These types of promotions are effective because they act as a value exchange between company and consumer, where brands ask shoppers to share their information in order to receive something in return. This strengthens a consumer’s trust and perception of a brand, as they’re being recognized and rewarded for their actions. For example, in Mars’s ‘Home Is Where The Cat Is’ consumer engagement program, Match Marketing and their client, Mars Petcare, asked customers to purchase $20 worth of qualifying IAMS™, TEMPTATIONS®, and Whiskas products, then upload their purchase receipt. In exchange, they received a ‘buy one, get one free’ digital coupon, as well as a chance to win 1 of 3 $10,000 home makeovers and a $5,000 donation to a cat shelter of their choice.

Targeted messaging campaigns

Targeted messaging is any form of marketing communication created and tailored towards a specific person or group of people who share similar characteristics and behaviors. This can include consumers who live in the same location, who prefer the same retailers, who purchase the same products, and so on. Targeted messaging can take the form of website copy, social posts, email campaigns, paid ads, and calls-to-action, and relies heavily on consumer data to create effective user segments.

Businesses primarily use targeted messaging to spread the word about their products and services, but can also use it to address people’s needs, interests, and pain points, building consumer trust in return. For example, they can send personalized recommendations based on past purchases or relevant discount codes based on previous interactions. As a result, consumers feel more incentivized to trust and remain loyal to the brand. In Universal Pictures’s All-Access Rewards program, members are segmented and targeted based on their engagement and purchases. Consumers who previously purchased a Jurassic Park movie may receive an email about an upcoming sequel, while consumers who answered a survey about their preferred movie genres might see a pop-up with special offers for relevant movie releases.

Gamification tactics

Gamification marketing is a tactic where brands use game mechanics like points, badges, rewards, and leaderboards to create memorable objectives, incentives, and experiences for their customers. Similar to contest marketing and gift with purchase programs, marketers typically use gamification to reward consumers for completing certain actions, such as watching a video, liking a social post, or making a purchase. They can then use data to identify the most popular actions, such as which games resulted in the most engagement, and continuously build stronger, more personalized experiences.

Gamification is especially effective for building consumer trust as it creates fun, interactive brand experiences that focus less on a company’s goals and more on a consumer’s interests. While shoppers might not want to open a marketing email about a new product or click a search ad about an online service, they may want to play a game to earn a discount code or free merchandise. For example, in Reckitt Benckiser’s Mucinex Fast-Max gift with purchase program, consumers purchased one qualifying product to receive a link to a custom spin-and-win wheel, where they play to win one digital gift card valued at either $5, $10, $20, or $100 from Walmart, Target, CVS, or Visa.

Customer loyalty programs

Loyalty programs are a full-scale marketing solution that expand on the previously mentioned strategies. They build consumer trust by recognizing and rewarding consumers for completing desired actions, inspire engagement through memorable brand experiences, and motivate users to provide their data in exchange for targeted content and messaging. Loyalty programs are also more community-driven than other types of marketing promotions, allowing people to connect with other consumers who share similar interests through leaderboards, discussion forums, and exclusive events. This creates a sense of authenticity and belongingness, further strengthening consumers’ trust in a brand.

As loyalty programs typically run for years, they give marketers more time to nurture deeper consumer relationships and secure their commitment. They also give brands more opportunities to capture data and build trust, rather than trying to collect as much information as possible within a single touchpoint. For example, in Toro’s The One Landscape Contractor Rewards program, members upload purchase receipts, watch educational videos, share brand content, and answer surveys about what landscaping services they offer, which purchasing factors influence their decisions, and so on. Toro uses this information to continuously improve their loyalty program and their overall products and services, demonstrating that their consumers’ voices are being heard.

Capture your consumers’ first-party data through short-term promotions and full-scale programs

To boost sales, improve ROI, and drive customer loyalty, brands should collect and leverage data in order to build consumer trust. This can include rewarding consumers with discount codes, exclusive content, and free products in exchange for information like purchase history and product preferences, then sending personalized content and messaging based on the captured data. Over time, this strengthens a company’s understanding of their consumers and a consumer’s trust in their favorite brands.

With PLATFORM³, brands can run data-driven campaigns to build consumer trust, including gift with purchase promotions, contests and sweepstakes, and loyalty programs. Modules like Contests and Promotions, Points and Gamification, Dynamic Messaging, and Data Capture & Analytics give marketers the tools and information they need to guide their decisions and develop stronger consumer relationships. To learn more, chat with an expert today.

4 Ways To Build Consumer Trust With First-Party Data