Future Enterprise

Scaling Empathetic Customer Experience Outcomes Profitably Using Zero- and First-party Data

With zero- and first-party data, offer more contextualized offers, products and services, and amplify the value exchange for both customer and brand.
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I recently had the opportunity to fly on a Delta Airlines flight for a conference and was offered a rather welcome feature that, as customers, we take for granted on the ground, but isn’t yet common in the air – “Free WiFi”!

What is notable about this service is that, at a time when most airlines continue to charge for an on-board internet connection, Delta was offering customers WiFi as a “free service”. Such a service could certainly be viewed as a value-add to the onboard customer experience (CX). To avail of the service, one is required to register or sign in (existing members) to the airline’s frequent flyer (loyalty) program.

Further interesting was when a day later, Ed Bastion, CEO of Delta Airlines, highlighted this very same point during an on-stage discussion with the CEO of the firm hosting the conference. This point was discussed in conjunction with how Delta Airlines incorporates customer experience insights gleaned from their voice of the customer efforts as a way to improve different elements of their customer experience.

As a long time CX thought leader and practitioner, I am constantly listening to, or observing for, “CX-related signals”. In the Delta example, there really are two elements at play. On one hand, by encouraging customers to sign up (or login) for their loyalty program, Delta gains firsthand information about their flyers in the form of zero- and first-party data. On the other hand, in exchange for sharing that information, customers benefit from being able to access the internet for the duration of the flight. A quick note on zero- and first-party data:

  • First-party data is the data that brands acquire from customers directly. It also includes analytics data that brands might derive from customer behavior signals and customer propensity insights. For example, but not limited to, segmentation analysis, cohorts, personas, or propensity for loyalty, advocacy, and churn that brands are laying over on top of the initial data that is gathered from customers.
  • Zero-party data is a special category of first-party data that customers explicitly provide to brands. The difference between zero-party data and first-party data is that customers know that they’ve explicitly given zero-party data. For instance, if a customer wants to order something online, they provide their name and address, credit card information, and billing information if it’s different from shipping address. All of which customers expect to provide because that information is directly related to fulfilling a customer need.

With so much of the value exchange between customers and enterprises hinged on customer data, CX insights can enhance and optimize empathetic experience outcomes when applied in a trusted manner. From a CX standpoint, Delta’s inflight WiFi service is a good example wherein Delta attempted to offer an equitable value exchange when customers engage with the company. IDC has previously discussed how enterprises can deliver value parity for their customers and improve the perception of customer empathy based on the experience they deliver. Establishing customer value parity is crucial since an imbalance can lead to poor customer sentiment and often results in customer attrition.

With zero- and first-party data, a company now has the ability to operate with unique customer insights – i.e., insights that their competitors don’t have access to. With an active portfolio of customer intelligence, enterprises can offer more contextualized offers, products, services, and work across their ecosystem of partners (in the example noted earlier, based on browsing behavior) to amplify the value exchange for both customer and brand.

Now, fundamental in the above narrative, is the ability to engender customer trust. In a deeply connected society, digital trust is the currency that facilitates future innovation and prosperity. For example, sharing CX insights between a brand’s ecosystem partners should occur via a trusted data exchange mechanism. Further, enterprises must recognize that every time a journey or a micro-moment is personalized for a customer, the company reveals that they know something about the customer. To this end, enterprises have an unequivocal responsibility to ensure they don’t fall into the trap of surveillance capitalism where customer data is considered a commercial entitlement.

To achieve customer empathy at scale, customer data must be treated as a currency and thus, a fiduciary responsibility of the brand. In the above example, the airline must not only gain customer consent for capturing data, but also be transparent and adhere to promises made about why customer data is being asked, the purpose for which it will be used, and the duration for which it will be stored.

At a time when enterprises are facing greater uncertainty in a tough economic environment whilst also facing increasing pressure to differentiate with their customers, experiences are the tip of the spear to innovate. Owned customer insights based on zero-and first-party data enable organizations to do so in a profitable manner.

Visit our Future of Customer Experience website to learn more about achieving customer empathy at scale and get more insights on our thought leadership for how CX can drive profitable growth.

Sudhir is responsible for research focused on how end user brands should consider evolving technologies to create and deliver empathy at scale in the ever-changing relationship between customers and brands. In his role, Sudhir monitors the continual innovation of technologies to produce research that discusses the impact that these technologies will have on customer and brand experience. Sudhir has more than 15 years of experience guiding organizations to achieve customer centric outcomes at scale.