Customer data powers everything marketers do. It helps them choose whom to target, how to talk to customers, and the best ways to keep people loyal to their brand. But relying on first-, second-, and third-party data isn’t enough anymore.
People are now more aware than ever of how brands collect and use their personal information. They often worry about data leaks and don’t trust companies to protect their privacy. Plus, new laws make it harder for marketing teams to work with customer data behind the scenes.
To tackle these issues, simply shift your focus to zero-party data. It’s the information that customers volunteer, offering a direct peek into their personal preferences. This strategy successfully addresses privacy concerns and legal restrictions, enabling effective marketing that’s personalized and respectful. Here’s how it works.
Zero-party data vs. first-party data vs. third-party data
As a marketer, you have access to 3 main data types: zero-party, first-party, and third-party data. Let’s look at how each one works.
Zero-party data
Zero-party data is the information people willingly share with your brand. It typically includes their likes and dislikes, personal context, and specific interests or needs they express directly to you. If you collect preference center data through your website, it also covers how consumers want to interact and communicate with your brand.
In addition to selecting their preferences on your site, consumers might proactively offer this data by filling out surveys, commenting on your social media posts, or through direct feedback. Zero-party data examples include a music streaming platform asking users for their favorite genres or food delivery apps inquiring about dietary preferences.
Since the customer intentionally shares zero-party data, it’s incredibly accurate and reliable. But there is a challenge: Getting people to share their information in the first place can prove difficult. Your brand must ensure customers know it’s worth their time and that you’ll keep their data safe, or they won’t bother.
First-party data
First-party data comes from direct interactions with your customers. This includes details from their purchases, how they use your website or app, and what they say to Customer Service.
For example, if someone buys a pair of shoes from your website, you learn what styles they like, when they bought them, and how they found them on your site. Then, you can use that information to suggest new shoes, timing your message for when they might need another pair.
The hard part about first-party data is putting together all the information from multiple channels to understand each customer better. You can only do this effectively with the right tools and techniques for managing and analyzing data.
Second-party data
Second-party data is information gathered by another company and then provided to you through an agreement. This data could come from your vendors, business partners, or companies you collaborate with on promotions.
For example, a software company could get data about how people use its platform from a third-party integration partner. Similarly, brands might share customer engagement data gathered through joint sales events.
Second-party data may contain personal information, but its origins and permission for use may be unclear since you didn’t collect it yourself.
Third-party data
Third-party data comes from ad platforms, data brokers, and analytics providers—not from brands directly. It’s gathered from what people do online using tools like third-party cookies, pixels, and device fingerprinting.
All these tracking methods collect information about customer behavior and preferences across the internet. For instance, Google’s ad network uses cookies to track what people do on websites so it can show them relevant ads.
Third-party data often gets collected and sold without telling people how it’s gathered or used. Relying too much on this data can raise privacy and legal concerns. Moreover, it’s not always accurate, leading to ineffective marketing strategies.
Why marketing teams should collect zero-party data
Zero-party data is a great choice because it lets you acquire information straight from your customers without risking their privacy. This helps you follow privacy laws, adapt to policy changes, and provide personalized experiences. Here’s more on why embracing zero-party data is the secret to modern marketing success.
Acquire customer consent to comply with privacy laws
Zero-party data helps you stay compliant with privacy laws, like the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). These laws require you to get permission before collecting data from people in the European Union and California, respectively. While these laws only apply to those areas, other places are making similar rules. Being prepared for this shift can help you maintain trust with your customers and avoid legal issues.
Align your marketing strategy with upcoming policy changes
Many companies like Google and Apple are making privacy stricter, changing the rules on how your business can track people online. For example, Google is getting rid of third-party tracking cookies. And Apple now makes apps ask before they can track what users do on other apps and websites. Other companies will likely follow suit, so it’s wise to prepare now by shifting toward zero-party data.
Deliver personalized content and experiences
Customers today want personalized experiences from their favorite brands. If your brand fails to deliver, your customers might feel disappointed. With zero-party data, you can better understand your customers’ preferences and provide them with a personalized experience. This strengthens brand loyalty and encourages repeat business, fostering long-term relationships with your customers.
How to effectively collect zero-party data
Capturing zero-party data is simple when you offer something valuable in return. By giving incentives and being transparent, you can motivate customers to share their preferences willingly. Here are some practical ways to collect valuable data directly from your target audience.
- Conduct polls on social media platforms to learn about audience preferences, online behaviors, and more.
- Set up chatbots or live chat to interact with people in real time while gathering information about improving the customer experience.
- Build interactive games on your website or app to engage users and offer personalized rewards at the end.
- Organize webinars, live shopping events, or other virtual experiences where attendees provide info in exchange for access.
- Offer exclusive e-books on gated landing pages, sending them via email once the customer fills out the form.
- Run giveaways requiring users to fill out forms with their personal info to enter for a chance to win.
- Create loyalty programs where customers earn rewards or discounts in exchange for their purchase history information, feedback, and preferences.
- Host social media contests where your followers share user-generated content to win prizes or rewards.
The key is to make the process appealing to customers and be clear about how you intend to use their data. If you don’t get the desired response at first, consider making your rewards more attractive.
Five ways to use zero-party data for personalized experiences
Zero-party data opens the doors to truly personalized customer experiences. With accurate, meaningful data, you can tailor digital interactions to fit each customer perfectly. This means ads that catch their eye, content that speaks to their interests, and product suggestions that feel like they were made just for them. Explore the following ideas for inspiration.
Targeted ads
You can use zero-party data to create targeted ads matching customers’ interests and actions. For example, if a customer tells you about their favorite gardening tools in a survey, you can show them ads for those items. The data can also help you tailor your ad content and messaging, increasing your click-through rate and conversions.
Personal content distribution
Zero-party data directly tells you what your target audience enjoys most. This allows you to share tailored content that matches their needs, interests, and purchase intentions. Your audience insights can also help you find the proper marketing channels to share your content for improved reach and engagement.
Relevant product recommendations
Insights from zero-party data can help you make highly relevant product recommendations to your customers. For instance, if a customer frequently buys fantasy books, you could recommend new releases or best-selling titles in that genre. The data can also indicate whether you might get a better response by emailing the recommendations or showing them on your website.
Custom loyalty program rewards
When you know what your customers like, you can offer personalized rewards based on each customer’s preferences. You could provide discounts on items customers have shown interest in, sneak peeks at upcoming products, or exclusive access to VIP events. Also, use the data to personalize communication about the rewards program to increase signups.
Individualized communication channels
You can leverage zero-party data to determine how customers prefer to interact with your brand. This data will show whether they prefer email, SMS, or phone calls. In some cases, customers may only want to hear from your brand through social media channels. This information lets you reach customers where they’re most comfortable, improving engagement and satisfaction.
A step-by-step guide to creating a zero-party data strategy
If you want to stay ahead of the changes, now’s the time to craft a zero-party data strategy for your brand. Just follow these 7 steps, and, by the end, you’ll have tailored marketing strategies based on valuable insights straight from your customers.
Step #1: Define your target audience and data collection goals
To kick off your zero-party data strategy, get to know your audience. Understand who they are, what they like, and what drives them to interact with your brand. Also, pinpoint where your audience spends their time online.
Use this data to build your ideal customer profile within a customer relationship management (CRM) system. Depending on your brand’s various audience segments, you may need to develop several customer profiles. Review each profile to determine where you’re missing key customer information.
To fill in the gaps, you’ll need to define your data collection goals. Determine what information you need to gather to personalize the customer experience. Do you need to know more about audience preferences, purchasing behavior, or demographic information? Identify the specific data points that will complete your audience profile and best guide your marketing efforts.
Step #2: Choose your zero-party data collection methods
Once you know your audience and goals, pick your ideal methods for collecting zero-party data. For the best results, tailor your choices to match your objectives.
For example, you could use sweepstakes to gather contact information. Surveys work great for collecting customer experience feedback, while polls provide excellent info on your audience’s likes and dislikes. To gain insights into shopping habits, collect data through a loyalty program with personalized rewards.
If you don’t have a detailed customer profile yet, you’ll probably need to use various methods to gather all the necessary data. Using surveys, quizzes, and loyalty programs together lets you learn more about what your customers like and how they behave.
Step #3: Design interactive data collection touchpoints
Next, you’ll need to create your interactive data collection touchpoints. Focus on making them engaging and easy to use above all else.
For quizzes and surveys, keep questions clear and offer rewards to encourage participation. Games should be enjoyable and easy to play, offering digital rewards for progress and options to share with friends.
Before launching, thoroughly test each touchpoint to verify everything works right. Then, move on to the next step to confirm that your plan complies with current consumer privacy standards.
Step #4: Verify that your plan satisfies customer consent criteria
To abide by privacy laws and overcome privacy concerns, ensure you obtain explicit consent from customers before collecting their data. Explain in simple terms why you want to collect data and how it will be used.
If possible, give people complete control over their data, allowing them to access, update, or delete their information easily. Otherwise, respond promptly to any requests to opt out or adjust preferences. Also, regularly check for changing privacy laws or customer preferences and adjust your practices accordingly.
Step #5: Communicate the value exchange to your audience
When launching your zero-party data collection tools, tell your audience about the perks of sharing their information. Let them know how it will improve their experience with your brand, like getting personalized product recommendations, exclusive discounts, or content relevant to their interests.
Show them you value their trust and are committed to giving something valuable in return. Use clear and friendly messages across all channels to help customers understand why sharing their data with you is worthwhile. Then, deliver on your promises to reinforce trust and encourage continued data-sharing opportunities.
Step #6: Use analytics tools to analyze the zero-party data collected
Once you’ve started collecting data, allow some time, typically a few weeks to several months, to gather enough information. Then, start looking for patterns and trends in the consumer data.
Use the data to complete your ideal customer profile, then identify gaps where you’re missing info. You can fill these gaps with more webinars, gated content, or surveys. This will provide a better understanding of your audience so you can tailor your marketing strategies accordingly.
Step #7: Refine your zero-party data collection strategy over time
As you collect zero-party data, make it a priority to refine your strategy over time. This means regularly checking if your methods are working well and helping you reach your marketing goals. If your strategy fails to deliver the desired results, switch up your tactics to improve the quality of data you’re gathering.
For instance, if you find that your survey data isn’t providing helpful insights, consider revising the questions or altering how you distribute the forms. Alternatively, you could switch from surveys to using chatbots for gathering information. Remember, make only one change at a time to accurately assess its impact.
Start collecting zero-party data for more personalized and effective marketing
If you want to elevate your marketing game, building a zero-party data strategy is a winning solution. It’s the kind of data your customers voluntarily share with you, setting a foundation of trust and clarity. Moreover, focusing on zero-party data aligns with evolving privacy standards, ensuring you’re ready for stricter data protection. By understanding customer needs and preferences directly, you’ll be equipped to personalize their brand experience.