Practise relationship marketing to avoid ending up like Sephora

Sephora is feeling the pain of a $1.2m penalty regarding its use of targeted advertising, the first punishment of what is sure to be many under the California Consumer Privacy Act (CCPA). 

The act, which was implemented in 2020 and will be expanded by the California Privacy Rights Act in 2023, has grown teeth – and Sephora, who engaged in third-party tracking practices that the CCPA considered to be a sale of their consumers’ data – has felt its bite. 

For retailers that are concerned about CCPA and its effects, now is the time to move away from the abusive consumer data practices marketers have relied on for so long and focus on putting the relationship between consumers and brands at the forefront. 

So, how do you start?

Start by getting to know your consumers

Every relationship starts off with getting to know one another. It’s no different when it’s between a brand and a marketer. 

Instead of collecting third-party data from cookies, like in the past, focus on collecting zero-party data. 

This is data that a customer intentionally and proactively shares with a brand. It can be made up of preference insights and purchase intentions. 

Now, considering the disrespect with which their data has been treated in the past, why would consumers just give this most personal of information to you? That’s where the value exchange comes in. 

Offer a value exchange 

In exchange for the data required to power true personalisation, consumers need to be entertained, they need to be tempted with exclusive access to offers or they need to receive something that makes it worth giving you their data. This is called the ‘value exchange’.

According to Cheetah Digital’s 2022 Digital Consumer Trends Index, 55% of consumers will trade personal and preference data to feel part of a brand’s community, while 86% of consumers will trade it for loyalty points. 

Constantly enrich profiles 

Once you get that zero-party data, now is not the time to stop. 

You want to be constantly refreshing the data contained in your customer profiles. Has their budget changed? Which competitor’s products do they favour over yours? 

What you know about your customer should expand and deepen with each exchange. It’s a continuous process: gather information, enrich what you know, engage your customers with a personalised campaign and repeat. 

This is relationship marketing

Building one-to-one relationships with consumers and turning them from unknown prospects into known consumers is all part of a relationship marketing strategy – and it will help you avoid veering into the dark side of bad data practices like Sephora. 

Acquisition is just the first step of what is known as relationship marketing.