#81 Ben Parr from Octane AI: Zero Party Data - Strategies for Collecting Data and Increasing Sales
The Ecom Show · Daniel Budai
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Show Notes
#81 Ben Parr from Octane AI: Zero Party Data - Strategies for Collecting Data and Increasing Sales
We’re delighted to welcome Ben Parr, the President and Co-Founder of Octane AI, to a webinar with our podcast host and CEO, Daniel Budai.
Octane AI is the zero-party data marketing platform for Shopify and Shopify Plus merchants. Its conversational technology enables thousands of merchants to collect zero-party data and use it to optimize conversions, average order value, and customer lifetime value.
If you want to form a real relationship with your customers, tune in to hear Ben teach us everything you need to know about:
✔️ The Problem: Rented Relationships vs Real Relationships
✔️ Zero-Party Data Marketing
✔️ How to Collect Zero-Party Data
✔️ Personalizing Your Marketing
The Problem: Rented Relationships vs. Real Relationships
Ben begins by identifying 2 key problems in eCommerce:1. Shopify brands have been building their business on top of rented relationships.
2. Apple has recently made a change that has completely destroyed the way you were used to doing business.
Before the iOS 14 update and recent changes in data privacy, Shopify Brands heavily tended towards Facebook Pixel in their marketing strategies. Facebook Pixel tracked user behavior and retargeted ads accordingly.
The problem with this strategy is that it’s a rented relationship. Facebook owns the customer contact information, the Shopify Brand does not. It has to pay Facebook to access contact information, essentially renting the relationship with its own customer.
Apple broke this relationship. The new iOS14 gives users the opportunity to opt-out of data tracking. Essentially, this makes it impossible for Facebook to run retargeting ads for iOS users.
96% of U.S users opted out of data tracking in iOS 14.5. The vast majority of people do not want to be tracked. The world of marketing is changing, and it’s time to adapt.
Retargeting ads based on third-party data are going away. Now eCommerce owners need to collect data directly. This is the era of zero-party data.
Ben advises against relying on pixel-based ads and third-party data, that is, rented relationships. Diversify your channels and find new ways of bringing people to your store. From there, focus on building real relationships with your customers using zero-party data. Don’t accept 2% conversion rates in pop-ups, aim for 8%-10% and higher.
Zero-Party Data Marketing
Zero-party data marketing uses data directly collected from your customers via questions. The answers to these questions are then used to personalize the entire shopping experience, from emails to SMS, to the website itself.
Third-party data is collected via several different websites. First-party data is collected on your own website using Google or Shopify analytics. Zero-party is different because it’s collected from data that is voluntarily provided by the customer. This includes information such as size, style, dietary preferences, etc. Such information can only be collected via direct questions. Zero-party data is, therefore, the only way to build a hyper-personalized customer journey.
How to Collect Zero-Party Data
Ben recommends using product quizzes to build deep relationships with your customers. He likens this to an in-store shopping experience. When a customer goes into a store, an associate may be there to ask questions and guide them towards the best product for them. For example, an associate at a skincare store may ask the customer about their skin type, current skincare routine, skin goals, etc. Zero-party data is about bringing this experience online.
Product quizzes are generally loved by customers because they often come to websites without knowing exactly what they’re looking for. The answers to the quiz questions build the customer’s buyer profile which is then used to lead them to the right product. Further, when the right questions are asked, engaged users are more inclined to provide contact information. From there, you can personalize content and products that you send in your campaigns.
The conversion rate in product quizzes is significantly higher than standard popups. As people are keen to receive their quiz results, conversion rates can be as high as 20 - 40%.
Zero-party data is not only fantastic for initial conversions, it can be stored and leveraged for future product recommendations and campaigns.
A conversational popup is a very simple but highly effective way to capture email addresses. Instead of “Enter your email to get 10% off”, “Get 10% off by answering this question” gives your customer the opportunity to interact with your brand and receive a decent product recommendation. The conversion rate is 46 times higher in a conversational popup than in a standard popup.
Personalizing Your Marketing with Zero-Party Data
Ben describes this as the “bread and butter” of zero-party data marketing. Marketing and remarketing are personalized using quiz data on email, Messenger, SMS, and Facebook ads.
A personalized welcome series, for example, is far more effective than a generic welcome flow. If a customer visits a haircare eCommerce store and shares that they prefer to wash their hair at night, their welcome flow would recommend overnight hair masks. Octane AI allows Shopify merchants to send Zero-party data to Klaviyo in order to segment personalized flows accordingly.
The lowdown? The future of eCommerce is in zero-party data: personalized websites, email flows, campaigns, and ads that build a customer journey that converts.
Eager to learn more? Download Octane AI’s free playbook for the definitive guide to zero-party data marketing.
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