Why Zero-party Data Matters for Modern Marketing
Zero-party data has become an integral part of modern marketing. As businesses have become more privacy conscious, the importance of zero-party data has become increasingly apparent.
But what exactly is zero-party data? How can companies use it to bolster their marketing efforts? Zero-party data is quickly becoming the gold standard for marketing in today's digital world.
So, What is Zero-Party Data?
Zero-party data is information a customer voluntarily and actively shares with you as a business. It includes data that a customer willingly provides, such as preferred product categories or birthdates. It also includes information collected through surveys, quizzes, and even games.
This is data that a customer freely provides intentionally for improved shopping experiences rather than being inferred from their site behavior alone.
There are other types of data to consider when it comes to modern marketing, such as first-, second-, and third-party data.
First-Party Data
Have you ever gone to your favorite website and been prompted for a survey about your experience? That's an example of first-party data. It's information that you, as the business, directly collect from your own channels, such as websites, mobile apps, social media, SMS, and email.
The biggest perk of first-party data is its accuracy. You know the source from which the data was collected and have exclusive access to it because you did not purchase it from another business. However, collecting first-party data can take a lot of time and effort to secure and requires an ample amount of it for it to be truly valuable.
Second-Party Data
While with first-party data, you collect the information yourself, second-party is essentially another company's first-party data that has been packaged and sold.
While it can be from a trusted partner, the main issue is trust — you must ensure that you trust the supplier. This data can help drive sales and fill in the gaps, making it easier for users to complete purchases more quickly.
Third-Party Data
Third-party data is purchased from third party vendors or aggregators. It has been collected from various sources and is not collected by you or your partner directly. It is often anonymous, making it difficult to attribute back to an individual customer or user.
This type of data is widely available and often sold on an exchange platform. Its primary advantage is its sheer size and scope due to being obtained from many sources.
Due to its anonymous nature, third-party data is often more affordable than first and second-party data.
But the biggest drawback with third-party data is that it is not exclusive, meaning other companies can buy the same data, making it less valuable. Plus, with larger volumes of data comes a risk to accuracy and data quality.
Advantages of Zero-Party Data
That "creepy factor" that comes with traditional marketing tactics is no longer necessary. With zero-party data, you can interact with customers in a more meaningful way and build trust.
Zero-party data is voluntary, active, and purposeful; customers are actively giving businesses the details they need to deliver a better customer experience. This is data that customers are willing to share, allowing companies to personalize their messages and create more targeted campaigns.
Plus, this type of data is most conducive to solving the personalization-and-privacy paradox when customers feel like their data is being used responsibly. In other words, people don't mind sharing their information as long as they know it is being used responsibly and won't be shared with others.
Creating a Zero-Party Data Strategy
Using zero-party data for better customer engagement comes down to intention and relevance. Before embarking on such a mission, ensure it's aligned with your overall customer data, content, and marketing strategy for the best results. Plus, combining this data with first-party data is essential to prevent any unfortunate silos.
The most important point? Make sure to articulate the value exchange clearly. Let your customers know how their data will be used and the benefits they'll get in return(hint: improved personalization). In other words, make it worth their while to share this information with you. Leverage the data collected in meaningful ways to create purposeful experiences that customers will appreciate.
Finally, make zero-party data a part of your omnichannel experience by gathering customer insights across multiple channels to help you better understand your customers and serve them more effectively.
Collecting Zero-Party Data
Since zero-party data is freely given, it shouldn't feel like a chore for customers to engage with you or furnish their information. You can get creative with collecting this valuable information. Consider quizzes, polls, surveys on social media, contests asking for info input - anything that encourages an entertaining interaction between you and your customers.
It's important to create the right kind of relationship with customers when collecting this info — tailor your approach in such a way that is easiest and most enjoyable on their end.
How Zero-Party Data Helps with E-commerce Personalization
It's integral for companies to have an e-commerce personalization strategy at their fingertips. Although difficult due to browser privacy features, you can use zero-party data responsibly in order to get acquainted with customers and offer personalized content more conveniently.
Utilizing this type of data will help connect clients with desired products while increasing brand loyalty and revenue gains — all while abiding by the blessing and curse that is privacy. In other words, don't just collect the data — use it to make meaningful connections with your customers that they will appreciate.
Final Words
Zero-party data is an invaluable tool for brands to help them better understand their customers and create personalized experiences in a privacy-centric manner.
Even though it may sound intimidating at first glance, taking something like a customer's purchase intentions into consideration can set the groundwork for more effective marketing strategies in the long run — further improving your personal relationship with customers and ensuring that their shopping experiences with you continue to exceed their expectations. Now, if that doesn't sound like a win-win, I don't know what does!
