What The Sports Industry Can Learn From Leading CPG Brands
I’m sure you’re no stranger to the importance of data in driving audience growth, but with the death of the cookie and privacy concerns on the rise, acquiring actionable data has become a huge challenge for marketers.
In this article, we’ll dive deeper into zero-party data as not only a replacement for third-party data, but a significant level up due to accuracy, relevancy and compliance as well explore what the sports industry in particular can learn from other industries who have embraced the shift to zero-party data.
In the last edition of the FanPower newsletter our very own Head of Product, Jeff Brunelle, wrote about “The Remarkable Rise & Crumbly Demise of Third Party Cookies in Sports” with some fascinating observations:
- The era of third-party cookies is coming to an end (this year)
- Direct relationships with customers will matter more than ever in a cookie-free world
- Transparency around customer data will build essential trust and loyalty with fans
- Zero-party data can not only replace third-party cookies, but be more powerful to growth than any cookie ever was
Let’s start by revisiting what zero-party data is in comparison to other forms of data.
In simple terms, zero-party data is data that a consumer voluntarily and intentionally shares with a company. Unlike first-party data, which is collected by a company through direct interactions with a consumer, and third-party data, which is collected by a company from external sources, zero-party data is explicitly provided by the consumer, often in exchange for something of value, such as a discount or exclusive content (more on the importance of this later).
For years the holy grail of data has been first-party data, but is that mantle about to be passed over? Whereas first-party data can observe behavior and tell you when someone adds something to a cart or makes a purchase, zero-party data can provide you with their likes, dislikes and intentions much earlier in the buying process. For many of us, actually asking customers what they want, rather than making assumptions or just firing information at them en masse, may sound like an obvious idea, but it’s a strategy that has been overlooked in the digital space due to the accessibility of third-party data. Clearly that is not the case in the offline world, where talking to customers directly has been a pretty successful sales strategy since the birth of commerce over 12,000 years ago.
Think about when you walk into your favorite brick and mortar store. You don’t get accosted by an attendant asking for you to enter your email address on a clipboard or iPad before you’ve even looked at the products. The best stores have attendants that are curious and ask specific questions to be able to put you on a buying path that has the highest probability of success and crucially results in a more enjoyable experience.
The key to collecting zero-party data at scale is providing a meaningful incentive that creates the ultimate value exchange. If I share my data with a brand, team or league, I expect to get some sort of value exchange by receiving a highly relevant discount, prize or recommendation. This is critical to acquire enough data to drive growth as 79% of consumers say they are willing to share their data if there is a clear benefit to them.
Trust & Compliance
Zero-party data can also solve another major issue for businesses and brands – consumer trust and compliance. Not only are customers more likely to intentionally share data that is accurate, relevant and up-to-date, the collection of zero-party data is based on the customer’s explicit consent, which means that businesses can collect this data in a compliant manner. When information is willingly and intentionally provided, businesses can prove they have opt-in permission to use it and this can be part of the strategy for achieving compliance with certain regulations high up on everyone’s agenda at present such as the European Union’s General Data Protection (GDPR) and California’s Consumer Privacy Act (CCPA), which require companies to obtain clear consent from customers before collecting and using their personal data.
CPG Leading the Way
Whereas zero-party data is a relatively new concept for many industries, including sports, in the CPG world, out of necessity to survive and thrive in a highly competitive marketplace, they have been experimenting with zero-party data for the last few years. You’d be hard pressed today to find a beauty or skincare company without quizzes, polls or some form of interactivity on their website and if you do, they are almost certainly failing to grow. As market leader Sephora has a quiz for almost every category they offer. Whether you’re looking for the perfect foundation or that everyday perfume, there’s a quiz for that.
Other CPG brands that have effectively used quizzes to personalize the experience and gather actionable data on their customers include:
Dove’s “Real Beauty Pledge” poll – Dove used a poll to collect zero-party data on its customers attitudes towards beauty standards, asking questions about body image, self-esteem and social media usage to generate insights on how to promote positive body image and self-esteem among its customers. The “Real Beauty Pledge” is now a cornerstone of its marketing strategy.
Kellogg’s “Which Cereal Are You?” quiz collected data on its customers breakfast preferences, dietary restrictions and morning routines to recommend the most suitable breakfast cereal from its portfolio.
Coca-Cola’s “Share a Coke” poll collected zero-party data on its customers’ name preferences. The poll asked customers to vote for their favorite names to be featured on Coca-Cola bottles, providing valuable insights into customer preferences and driving engagement with the brand.
It’s not just CPG that has seen the benefits of asking their customers questions directly. From Starbucks to Netflix to Nike and Spotify, these brands are finding ways beyond third-party data to understand how their fans feel about their product and create a more personalized experience. Here’s a few more lesser known examples to take a look at for some inspiration:
Trade Coffee – coffee is no longer a simple choice of dark, medium or light and with the endless options comes the “paradox of choices effect” where it actually leads to less decisions being made and therefore lower conversions. Trade Coffee simplifies the experience with a quick quiz to provide personal recommendations for your subscription box.
Helix Sleep – buying a mattress can be a daunting task. Helix makes it easy by taking you through a detailed quiz that eventually provides you with the perfect recommendation for your needs. No more spending your Sunday lying aimlessly on 300 mattresses to find “the right fit”.
Third Love – recognized that bra shopping was complicated and often lead to disappointment. Their quizzes that focused on truly understanding how their customers felt about bras actually led them to launch new product lines with half sizes that created a whole new market for them.
What does this mean for the Sports Industry?
Is zero-party data the new holy grail of fan data? Quite possibly. At the very least, it is a powerful opportunity for teams, leagues and media companies to understand how their fans feel about their product on and off the field of play and create meaningful relationships that will drive loyalty. In order to harness the power of zero-party data there are three key learnings from eCommerce:
Three Ways to Harness the Power of Zero-Party Data
- Build Trust With Their Fans – CPG brands have built trust with consumers by being transparent about how they use data. They have clear privacy policies and make it easy for consumers to opt-out of data collection. If your fans don’t trust you, you’ll never be able to acquire zero-party data at scale.
- Offer Value in Exchange for Data – CPG brands have experimented with all sorts of value exchanges to incentivize customers to give them their data. The conclusion being that it needs to be highly relevant to the brand, but doesn’t need to always be a big ticket item. Fortunately for sport, there are easy and obvious value exchanges that can take place, whether it’s a free ticket, or jersey or something that money can’t buy like player meetings or exclusive experiences.
- Personalize. Personalize. Personalize. – customers and fans are willing to give away their zero-party data for meaningful incentives and a more personalized experience. Why? More than anything it’s about saving time and money whilst finding the right product for them. If fans recognize that their favorite team or league is trying to offer them a more personalized experience, they are much more likely to interact with the content in the first place leading to more data, and more personalization…
As we transition from over reliance on third-party data, the sports industry has an incredible opportunity to follow in the footsteps of many CPG brands by creating a much more personalized experience for their fans. The good news is sports content is primed for including quizzes, polls and other interactive elements due to the conversational nature of the content produced and the passionate engagement we get from fans. It’s time to go deeper than just categorizing a customer as a sports fan, or a Cowboys fan. It’s time to understand how they get to the game, what their favorite snack to eat whilst watching the game is, who their favorite player is and how many times they will visit the stadium this year. Enter the age of the fan.