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"I throw them in the garbage."
That's what a field marketing manager told Brad Feinberg, the VP of Media and Consumer Engagement when he asked what happens to the names after hosting a contest and drawing the winner.
Little did they know that two years later, collecting that information would help the drink and brewing company save over $300,000 on data fees when buying online ads.
After helping 200+ brands scale their data collection efforts from their tours, concept showrooms, and group classes, we understand how difficult it can be to capture consumer information from an in-person event. And yet, this data is the secret weapon against several issues working against brands, including, but not limited to - broken consumer trust, online tracking changes, and privacy regulation.
So how are companies like Michaels, Nestle, and Sierra Nevada building their first-party data strategy? By offering customers an immersive live experience for their information—otherwise known as a two-way value exchange.
Why Live Experiences Are an Ideal Value Exchange for First-Party Data
According to the Boston Consulting Group, the best practices for collecting first-party data are when:
"The company gains the ability to deliver a better customer experience and more effective marketing, and the customer gains useful information, assistance, and offers."
Another way of thinking about the value exchange is through the rule of reciprocity, which is the tendency for people to provide favor to others who have given to them previously. But psychology scholar and author, Robert Cialdini points out that it only works if:
"Requesters who hope to commission the persuasive force of the [rule] have to do something that appears daring: they have to take a chance and give it first. They must begin an interaction by providing initial gifts, favors, advantages or concessions without a formal guarantee of compensation."
To analyze the rule of reciprocity, let's look at how hotels use social norms to encourage environmental conservation. In a study conducted at a well-known chain, guests were given two different cards in their rooms asking them to reuse their towels. One read that the hotel had already gone ahead with contributing to an environmental nonprofit in the name of its guests; while the other would contribute in the future if the guest complied with their request.
The result? Guests informed of the hotel's donation after-the-fact reuse their towels 47% more than guests who were encouraged to do so in exchange for a future donation in their name.
We believe the same principle applies to brands that invest in live experiences. They're an ideal value exchange for data because "companies can build trust" while allowing "customers to withdraw permission at any time if trust or benefits are not being established by the brand."
But What Exactly is a Live Experience?
To understand what a live experience is, think of them in contrast to economic offerings like commodities, goods, or services. According to Joe Pine and James Gilmore, authors of The Experience Economy:
"When a person buys a service, he purchases a set of intangible activities carried out on his behalf. But when he buys an experience, he pays to spend time enjoying a series of memorable events that a company stages—as in a theatrical play—to engage him in an inherently personal way."
To illustrate their point, the authors explain how Walt Disney transformed the characters and worlds of his movies into one immersive concept: Disneyland. And with the Parks and Products division's recent report of a 308% increase in revenue despite a global pandemic, Pine and Gilmore's hypothesis still holds true:
"Time is the currency of experiences. If you get customers to spend more time with your brand, they will spend more on your offerings."
But you don't have to open an amusement park to invest in experiences. Experiences can be in-person or virtual, one-on-one or in a group setting; so long as participants activate three of the five senses:
For example, any person of legal drinking age can walk into any major grocery store chain and pick up a six-pack of Guinness Beer. But a customer only uses touch and sight to make that purchase. In contrast, a tour of the Guinness Storehouse activates all five of the senses through:
- Displays and exhibits (Sight)
- Listening to the rush of water (Hearing)
- Sampling the beer (Taste)
- Running your hands through barley (Touch)
- Inhaling the scent of hops (Smell)
So put yourself in the shoes of the customer. Someone who's never been to Dublin may walk past the storefront display to purchase another brand of beer. But for someone who's taken the Storehouse tour and understands how it's manufactured, the familiar branding will trigger a positive memory association and increase their likelihood of making a purchase.
But Live Experiences Have a Data Problem
However, we noticed a problem when one of our customers — a global consumer brand — wasn't receiving customer data back from the agencies who run live experiences for them.
The more we analyzed this issue across other brands, the more we realized there are four parts to this data problem:
- Incomplete or inaccurate data
- Data held in departmental silos
- Non-compliant data storage practices
- Lack of actionable insights
This is just a sneak peek of what's in the full guide to building a first-party data strategy. Download the "How to Build a First-Party Data Strategy Through Live Experiences" eBook to learn more about the problems faced by brands who run live experiences, the four crucial components of a live-experience-driven first-party data stack, as well as how three companies build customer loyalty using an experience relationship management tool like AnyRoad.
