"Having a deep knowledge and understanding of who customers are, where they are coming from, and their behavior on and off the site all help inform how and where to best serve customers." - Elina Vilk, Chief Marketing Officer WOOCOMMERCE.
Knowing your customers is the cornerstone of any successful business strategy. Today, the brands that win are the ones that serve meaningful, relevant content to their most engaged customers. If you listen to your customers and your data, you can obtain a holistic view of them - allowing you to anticipate their needs before they even have to ask.
However, this is much easier said than done. With major companies shifting towards consensual data tracking and strict privacy policies, relying solely on third-party data has become hard. Google recently announced its plans to phase out third-party cookie tracking on Chrome browsers by the end of 2023.
"We don't believe these solutions will meet rising consumer expectations for privacy, nor will they stand up to rapidly evolving regulatory restrictions, and therefore aren't a sustainable long-term investment. Instead, our web products will be powered by privacy-preserving APIs which prevent individual tracking while still delivering results for advertisers and publishers," - Google.
If you're a brand that relies on third-party data for creating brand strategies, marketing campaigns, and advertisements you must be wondering how to navigate this new landscape.
So let’s dive in.
The answer is simple - just ask your customers!
Marketing based on Zero Data and Customer-First Data has been the main way of reaching existing customers and attempting to convert them into repeat customers. With targeting options now reduced on several ad platforms, it is quickly becoming the only way to reach them.
Unlike third-party data, the zero data and customer-first data approach is driven by consent. It refers to the data you source directly from your customers, including :
Information customers willingly share for personalized experiences, like their email address, phone number, or birthday.
Information brands can gather by observing user activity on various channels, such as - pages customers visit on your website, links they click from your emails, etc.
Third-party data is implicit - based on the "clues" and "fingerprints" people leave behind as they make their way around the internet.
However, collectible-first data is explicit. It considers actual evidence regarding whether people want to engage with your brand or not. Then it allows you to nurture those relationships by delivering personalized marketing experiences consumers expect and demand from the brands they love.
First-party data that is owned by companies is based on observable behavior like purchase trends, website activity, email and SMS engagement, and customer service interactions. Good customer-first data can answer the following questions:
Who has or hasn't made a purchase?
How long will a customer take before ordering from your site again?
How much money do your customers spend on average, and on what? And why?
Do your customers have a habit of buying during gift-giving holidays?
What makes a particular customer unsubscribe?
Who is likely to open transactional emails, and who is more likely to click on promotional or educational material?
What makes a customer click? What makes them buy?
Online stores, e-commerce data platforms, and back-end integrations like third-party logistics, loyalty program tools, and customer review tools are good places to gather valuable first-data.
In other words, with customer-first data, you're listening - not spying. And based on the quality of the marketing it inspires, consumers can tell the difference: According to Google, using first-party data helps marketers achieve up to a 2.9x revenue uplift and a 1.5x increase in cost savings.
"Whoever gets closer to the customer wins." - Bernadette Jiwa, Founder - Of the Right Company
Once a customer volunteers to share their contact information by placing an order or signing up to receive emails or texts, you'll be able to see individual customer-specific data in the back end of your online store. Whether you're using Shopify, BigCommerce, WooCommerce, Magento, or another e-commerce platform, your dashboard can provide powerful insights into what individual customers want.
Who has or hasn't made a purchase? How long do they wait before ordering again? How much are they spending, when, and why? Who's spending big, and who's bargain-conscious? Who's spending more during holidays? What products do they seem to like the most, and what effects do they often buy together?
All this information can be gathered by observing user activity on your channels. Understanding who your customers are and their behavior on and off-site helps you gain insights into how to serve them best.
Pay attention to your marketing channels for insights into what kinds of email and SMS communications drive the most engagement with your customers.
What makes someone unsubscribe? What kinds of messages receive the highest engagement? What types of messages work better as an email versus a text, and vice-versa?
With collectible-first data, you can go beyond vanity metrics like open and click-through rates and deep dive into your data to understand what kind of communications drive revenue.
The more questions you ask, the more data you have at your disposal. If you're piecing together multiple solutions, you may have to get a developer on board to ensure your data points from several sources are talking to each other.
Here are a few examples of how to ask relevant questions to understand your customers better:
Pop-ups, fly-outs, or embedded sign-up forms are vital for capturing data from first-time website visitors. Go beyond core fields like first and last name, contact information, and preferred method of contact by using forms to ask customers about everything from their shopping intentions to their interests.
Quizzes are beneficial for gathering data about your customers' preferences. You can offer personalized product recommendations tailored to their responses, send promotional emails to more relevant audiences, and even experiment with specific campaign quizzes for special sale events.
Set these up to auto-send once the customer completes a purchase and has had a chance to use the product.
Why did they buy it? How was their experience? Make it worth their while by offering everyone who takes the survey a discount code or gift.
By integrating with major review platforms, your collectible data can help you pull in data that will shed light on how your customers feel about products and services. Then, you can use that social proof to power up your marketing efforts.
Loyalty programs collect data about your top customers' purchasing habits. Keep customers engaged by reminding them when they're eligible for their next reward or approaching a new loyalty tier.
From referral programs to help desk providers, it's possible to integrate your collectible-first data with hundreds of technologies and platforms, empowering you to unify customer data from many sources.
First-party data comes from your website, apps, or phone calls with customer service. Collecting this information still requires asking many questions to individual users and personalizing user profiles based on this data.
Web2 companies use Customer Data Platforms to gather and organize first-party data from various touch points to build comprehensive customer profiles. These profiles have helped marketing and product teams everywhere to create high-impact strategies that power the personalized and customized omnichannel experiences customers have come to expect. However, this data is not always very accurate and doesn't answer many questions about what makes a customer or a community excited about a brand.
Public blockchains are distributed, decentralized databases that anyone can access and are the building block of web3. Unlike the guarded databases of web2 platforms, transactions recorded on-chain can be read forever by anyone. Wallets and communities built on social media platforms can represent a user's web3 identity more accurately by answering questions about a user's needs and purchase behavior. Web3 maintains an untampered history of a customer's purchases and behavior on-chain.
We can answer the following questions about a user or a group of users solely by understanding their wallet activity, the communities they are a part of, and the collectibles they own:
By analyzing a user’s wallet activity, you can answer the following questions about them:
How much do they spend on collectibles and on-chain purchases?
Who are your most active collectors?
What events have your users attended recently?
What DAOs do they participate in?
How old is your average collector?
Who are your top 5 collectors, and how much do they spend on brand collectibles?
What communities are your users a part of, and how often do they usually interact with them?
How often do users engage with their communities, and what are their expectations?
Which other community members would be interested in your brand? Would they buy from you? How much would they potentially spend?
All this information can be gathered just by observing a user's on-chain activity and their interactions with the communities they are a part of on social media platforms such as Twitter, Discord, or Telegram. This data collected from users by understanding their on-chain activity is called Collectible-First data.
Web3 is driving a new shift in customer-brand relationships and creating an era of "empowered customers." With web3, customers can own their data and choose who to share it with.
Customer-first data works when your customer's interactions happen on platforms you own, like websites and apps. But what about customer interactions happening on-chain or on Twitter, Discord, Telegram, and Signal?
The solution to this is collectible-first data. Web3 users engage with brands through communities built over off-chain platforms like Twitter, Discord, and Telegram and on-chain wallets like Metamask, Coinbase, Rainbow, and several others.
So, how do we use a combination of on-chain and off-chain data to understand users better?
In web2, users create separate accounts for all platforms.
In web3, users connect with public wallets, and all their interactions are stored on-chain using collectibles and tokens.
These tokens are the building blocks of community in web3. They serve as on-chain connections between wallets and intelligent contract addresses, which are stored on decentralized blockchains instead of centralized platform databases. These databases are united by validators such as ENS address, Polygon ID, and other wallets.
Collectibles define the relationship between a community and its members.
In web3, community members hold collectibles representing their relationship with the brand and its community. Using these collectibles, brands can do anything to engage directly with their customers:
A brand/creator can directly access who holds which tokens on a decentralized, transparent chain. This is useful to reward members, understand their buying habits and create strategies to target them for promotions or advertisements.
Members can try new token-gated experiences together without creating new wallets.
Brands can understand who their most loyal customers are and reward them accordingly.
Web3 gives communities direct ownership of their relationships and allows them to bring those relationships to any token-enabled experience. This offers brands a chance to create interoperable experiences and services for communities that were previously not viable.
In web2, the product is software delivered to a customer.
In web3, the product is often art, information, community, relationships, and ownership using blockchain.
Blogs or articles on Substack, Mirror, or Medium
Community on Discord, Telegram, Twitter, or Signal
NFTs purchased through on-chain marketplaces like OpenSea or LooksRare
Almost all of a web3 project's interactions with its customers happen on platforms the project doesn't own.
While web3 enables cross-platform engagement, it becomes hard to aggregate data. This is because we're dealing with both off-chain and on-chain data, which isn't available in an aggregated format.
To get a complete user profile, a web3 NFT project would need to link customer touchpoints across every platform and standardize data inputs. To run a community effectively and enable personalized community experiences, we need a solution that can gather cross-platform data together to build a complete user profile.
We observe a cascading behavior of users across various social platforms. When connected in a network, customers can influence each other's behavior. This effect is amplified in the case of web3 communities.
Collectible-first data can help create personalized campaigns targeted toward individuals and communities. This can also allow brands to identify loyal customers and reward them with perks and incentives to continue engaging.
Collectibles can tell a whole lot about a user's persona. The type of communities a user engages with, giveaways they show interest in, collectibles and POAPs they've collected from brands, wallet activity, and community engagement across various channels can help paint a clearer picture of the user than traditional web2 touch points.
A web3 native CRM could unify data across all these touch-points to create comprehensive user profiles from these on-chain and off-chain data sources. This comprehensive dataset can then enable more traditional CRM capabilities for web3 brands.
Layer-E is the leading Collectible Relationship Management product suite in web3 built for creators, companies and fandom to turbocharge revenue and reach. Interested in being part of our exclusive club of launched brand including Coinbase, Flipkart, Mercedes and more? Get in touch with us here to build your Collectible Relationship strategy with us.