Loyalty pays, and soon it will be even more lucrative as a critical marketing channel. Google is eliminating third-party cookies, and by now the world has mostly recovered from its pearl clutching. In the absence of cookies, marketers need new channels and innovative solutions to gather first-party data and engage in new ways with target audiences. 

Loyalty programs are a perfect use case for first-party data, as they give the user value back in exchange for sharing their data with the brand. But beyond this value, some brands are taking the step even further, using it as an opportunity to engage with other brands. 

Finding the Right Partners

Kohl’s and Amazon are an early example of the branded partnership angle. Through a unique setup, Amazon customers can bring Amazon returns to Kohl’s, who will pack, label and ship it on their behalf. And they give customers a Kohl’s coupon for the store right at the counter. While this 2019 partnership wasn’t purely a data play, it highlights the significance of creating the right connections in the marketplace. The pilot started with 100 Kohl’s locations. Now, two years later, it has been implemented in all Kohl’s stores nationwide outside of Alaska. 

More recently, Starbucks made a splash with its loyalty program. On the company’s October earnings call, Starbucks CEO Kevin Johnson discussed plans for integrating Starbucks rewards with other merchant rewards by way of cryptocurrency. The intent, he says, is to drive mutual beneficial value for consumers and brands. “This will enable customers to exchange value across brands, engage in more personalized experiences, enhance digital services and exchange other loyalty points for Stars at Starbucks,” Johnson said. He additionally pointed to the recent launch of a Canadian loyalty program with Air Canada, where members can link accounts for improved user benefits. 

Another example is Target, which recently launched a brand partnership with luxury beauty provider Ulta, on top of existing partnerships with Disney and Apple. During Target’s most recent earnings call, Chief Growth Officer Christina Hennington says the company continues to expand its shop-in-shop experiences to “drive traffic and inspire guests.” Echoing the Starbucks initiative, users can also link their Target Circle and Ultamate Rewards accounts, driving further brand cooperation through loyalty programs. 

Leveraging Loyalty Data to Make up for Lost Cookies

Third-party cookies were the law of the land for a while, but their time has come to an end. As we enter a world without cookies, loyalty programs provide a smart option for reaching users with first-party data. Here are three key things brands should keep in mind as they build their data strategies and loyalty programs without cookies. 

1. Value matters. If customers are granting you personal data, reward them with brand value. This can come as immediate gratification, like reward points upon sign-up or a specialized badge. Or, it can be a promise for future value in exchange for more engagement, like a coupon code for a product review or a free sample with a referral. When customers do not feel valued, they also do not feel loyal. Get the most from your loyalty program by providing consistent value to your users.

2. Don’t fall into the discount trap. Customers appreciate coupons but discounting is far from the only way to add value within a loyalty program. Not only that, ineffective discount strategies can quickly become a race to the bottom. When it comes to loyalty, focus on adding value for customers in ways that encourage engagement, serving up key products and services that boost your brand’s importance in the marketplace.

3. Do something useful with your data. Personalization is how you build loyalty. Whether it’s as simple as a personalized birthday message or as complex as behavior-based shopping recommendations, make a plan for the data you collect and be strategic about how you’ll use it. Don’t just offer generic sales promotions — use your first-party data to build a relationship with your user.

4. Don’t take more than you need. Data is only as good as what you do with it. If you collect more than you can use, you disrespect your customers by wasting their time and holding on to information you don’t need. Instead, be thoughtful about the data that should be collected and apply it strategically. 

There is no replacement product for third-party cookies. But, as brands shift their strategies, they should seriously consider investing in first-party data assets like loyalty programs. These programs offer a prime opportunity to deliver value to the user in exchange for personal data. 

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Featured image by John Schnobrich on Unsplash.