What Is It and How To Collect It

We’re all navigating a shift in the evolving landscape of online privacy. 

You’ve probably noticed your customers are becoming more privacy-conscious and insisting on a more considerate approach to their data. Businesses like yours need to rethink the data game, saying goodbye to the old ways like third-party cookies.

Why?

Because it’s time to say hello to zero-party data.

Unlike rule-bound data options, zero-party data is a bit of a rebel. It operates without tight regulations, which probably gets your marketing motor running. Zero-party data is the gas that fuels personalized strategies without stepping on anyone’s toes.

Now, let’s break it down a bit.

What’s this zero-party data buzz all about? And, more importantly, how can it charge up your business? Stick around as we unravel the mystery and explore how zero-party data might just be the key to renewed success.

What is zero-party data? 

Zero-party refers to information that people willingly share with businesses in a direct and transparent exchange. Think contact details, personal preferences, opinions, and whatever other details you need to understand your customers.

You can get zero-party data through on-site interactions, such as contact forms, surveys, and registration forms. These voluntary contributions empower companies to build more personalized and mutually beneficial customer relationships.

What is zero vs. first, second, and third-party data?

The difference between zero, first, second, and third-party data lies in the source of the information.

Zero-party data

Zero-party data refers to the information deliberately and proactively shared by customers with a brand. This category includes details like preferences, purchase intentions, personal contexts, and how individuals wish to be recognized by the brand. 

The primary advantage of zero-party data lies in its accuracy, as it comes directly from the customer without any doubt about its source. However, a crucial aspect is the expectation of value exchange, as customers anticipate receiving something in return for sharing their information. 

First-party data

First-party data encompasses information collected directly by a company through its various channels, such as mobile apps, websites, social media, SMS, and email. This data is advantageous because it belongs solely to the company. This provides a competitive edge, and is reliable due to its known source. 

Despite its value, the challenge lies in the constant need for more, requiring significant time and effort, especially when dealing with new customers, to make it truly valuable.

Second-party data

Second-party data is essentially another company’s first-party data, which is packaged and sold. Ideally sourced from a trusted partner, this information offers additional customer insights. 

The key advantage lies in acquiring more data to enhance sales and fill gaps, often ready for immediate use upon purchase. However, a significant hurdle is establishing trust, as the purchasing company did not gather this data.

Ensuring confidence in the data supplier is crucial to effectively using this information.

Third-party data

Third-party data is information collected by a company that has no direct relationship with the customer.

This information comes from a variety of sources, including data brokers, public records, and individual online activities. Marketers have the option to buy access to large datasets that include details on demographics, interests, and past purchases.

The main advantage of using third-party data is its ability to help businesses reach a broader audience beyond their current customers. This enables the creation of highly personalized advertising initiatives aimed at new segments of customers.

Nonetheless, there are notable concerns with third-party data, such as potential inaccuracies and limited control over the data since it isn’t collected firsthand. With growing privacy concerns, it’s increasingly important to ensure data is acquired responsibly from trustworthy sources.

Why is zero-party data crucial?

Zero-party data allows companies to understand their customers’ needs and gives customers control over their own data, which shows them that they can trust you.

By harnessing their info ethically and transparently, you can create experiences that are made just for your clients. Here are some more core benefits of zero-party data.

E-commerce business

As an online shop, harnessing the power of zero-party data can significantly improve the shopping experience for your customers.

By understanding what they like and want, you can use this data to suggest products that align with their interests, making your recommendations feel personalized. Additionally, utilize zero-party data to create discounts and offers tailored to each customer’s preferences. 

Software development firms

For software development firms, zero-party data becomes a guiding light in enhancing your products.

By asking users what features they want and paying attention to their preferences, you can use this data to shape the software to meet their needs. Improve the user interface and experience by understanding how they want to interact with your software.

When testing new features, involve those who have expressed interest, making your software cooler and more user-friendly based on their input.

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Marketing firms

Understanding your audience through zero-party data is the key to creating engaging and effective campaigns. By learning about what individuals enjoy, you can craft advertisements and events that resonate with their interests. 

Mecca, an Aussie beauty retailer, uses zero-party data smartly. Their Mother’s Day quiz helps customers define their shopping style, from novice to beauty enthusiast.

Mecca's Mother's Day quiz helping customers define their shopping style, from novice to beauty enthusiast.

Source: 3radical.com 

By knowing this, Mecca adjusted email frequency. For beauty novices, it’s just twice a year, while beauty lovers get more frequent updates. This way, emails stay relevant, avoiding annoyance and ensuring a positive customer experience.

Sales teams

Sales teams can benefit significantly from zero-party data by gaining deeper insights into customer preferences and behavior.

Armed with this information, sales professionals can approach interactions with greater confidence, knowing they have a more nuanced understanding of the customer’s desires and expectations.

Entertainment industry

In the entertainment world, leveraging zero-party data can enhance your audience’s joy of discovery.

Use this data to suggest new music, movies, and other entertainment options based on what users have shared about their likes and dislikes. It’s like being a helpful friend who knows their taste and guides them towards new and enjoyable experiences. 

How to collect zero-party data? 

Here are some ways to collect zero-party data. These strategies can help you gather valuable information directly from your customers and prospects.

1. Quizzes 

One of the most effective ways to collect zero-party data is through quizzes.

By creating engaging and interactive quizzes, businesses can gather valuable information directly from their customers. These quizzes can be designed to ask specific questions related to the products or services offered and general questions about preferences and interests. 

For example, check out the Kopari quiz. It asks about your preferences and skin concerns and then suggests the best products for you. After the quiz, they even give you a discount! Smart, right? This is called quiz marketing.

Kopari Beauty quiz asking about preferences and skin concerns and suggesting the best products based off the answers.

Source: koparibeauty.com

Apart from this, getting customers involved with your brand through fun trivia quizzes is a clever strategy for gathering valuable zero-party data. Feastables, a snack brand, did it brilliantly. They hosted a trivia contest where the first 1000 participants to answer correctly scored a mystery prize. 

Trivia contest hosted by Feastables.

Source: audience.io

Surprisingly, 21,000 people joined the game, and what’s even more impressive is that 14% of those who opened the email went on to play. It turned out to be the most lucrative email of the summer in terms of revenue.

2. Conversational chatbots

Chatbots are all the rage these days, and they can be an excellent way to collect zero-party data. A chatbot on your website or social media platforms paves the way for you to engage with customers in real time and ask them questions about their preferences and interests.

Babylon Health is an online service from the UK that uses bots to chat with users about their health. Upon registration, individuals input their symptoms, prompting the bot to conduct database checks and provide tailored advice. The bot checks its database, gives you advice, and can even hook you up with a live video chat with a real doctor.

Source: medicalfuturist.com

What’s neat is that each time you talk to the bot, Babylon learns more about you. It’s like having a friendly nurse on call for you. Furthermore, they use all this info to customize user offers to make them feel like they have their own personal health advisor.

3. Surveys and forms

People love sharing their opinions, and you can use that to get valuable zero-party data.

Connect with your audience effectively by leveraging surveys and personalized emails to gather essential zero-party data. Seamlessly integrate surveys into your website or email campaigns, involving customers in decision-making processes.

Implement post-purchase surveys, a strategy that Tortuga employs to gather feedback and enhance your products based on customer insights. 

Post-purchase surveys employed by Tortuga to gather feedback.

Source: convertflow.com

What’s smart about the survey is that it’s not the same for everyone. If you’re new, they ask one set of questions. But if you’ve bought from them before, they switch it up because they already know your first answers. They want to figure out why you came back for more. 

This customer-centric approach extends further by combining surveys with personalized emails. Understand customer preferences and pain points through surveys or preference centers, allowing you to tailor marketing campaigns accordingly.

For example, if someone prefers natural skincare products over synthetic ones, you can send them targeted emails promoting your all-natural line. You can ask for their skin concerns, preferred ingredients, and budget here. 

This gives you valuable insights into what products to recommend and shows that you care about your customers’ preferences.

4. Contests

Everyone loves free stuff. So why not use that to your advantage as a business? Contests and giveaways are a great way to collect zero-party data. You can ask participants to provide their email address, age range, or interests to enter the contest. 

It’s a win-win situation for both parties – the customer might get something cool and you get valuable data. Make sure your prize is relevant to your business and target audience so you gather high-quality leads.

Home gym contest organized by Men's Health magazine.

Source: menshealth.com

Men’s Health, a fitness and lifestyle magazine, organized a home gym contest on their website. They offered ten home gym sets with USN (Ultimate Sports Nutrition) bundles as prizes. The entry process was simple – participants just needed to visit the website. 

This approach proved successful, attracting numerous entries and significantly boosting their website traffic.

You can take inspiration from beauty products brand Yves Rocher. Its website has a separate segment dedicated to these exciting contests and giveaways, creating a buzzing hub for beauty enthusiasts. 

Segment on Yves Rocher website dedicated to contests and giveaways.

Source: yvesrocherusa.com

This way, the brand can easily collect information about their customer’s preferences and interests while creating a fun and engaging experience for them. 

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5. On-demand webinar

Host a webinar on a topic relevant to your business. When they sign up, ask them for their contact info and why they’re interested in your session. 

Not only does this provide you with more data, it also allows you to engage directly with potential customers and showcase your expertise in the industry. Plus, you can offer exclusive deals or discounts for attendees, further incentivizing them to share their information with you.

6. Loyalty programs

We all love rewards and discounts, so why not use them to collect zero-party data?

Have customers sign up using their email address and opt in for personalized communications. This lets you gather information on their shopping habits and nudges them to keep engaging with your brand for that free appetizer or latte.

Source: play.google.com

Starbucks has a neat rewards program. You use their app to order your coffee, and earn stars. Collect enough and you get free drinks, food, or even Starbucks gear. It’s super easy. In turn, Starbucks learns about customers’ habits to give them a better experience.

7. Interactive lookbook

With the rise of e-commerce, more and more brands are turning to interactive lookbooks to collect data. Your customers browse through products virtually in an attractive, engaging format. 

As they interact with the lookbook, they provide you with data you can use to learn more about what makes your customers tick, including what they buy and why, aka purchasing intent, aka what you must have to create targeted campaigns that resonate with individuals. 

8. Website pop-ups

Do you know that pop-up ads don’t have to be annoying? With the right mindset, they turn into powerful data-collection tools.

Some brands like Ella + Milla, Miracle Mink Hair, and Bariatric Fusion use these things called conversational pop-ups. It’s like when you’re in a store, and a clerk asks if you need help. Sometimes, it’s better to just talk to customers, you know? 

Pop-ups on the Bariatric Fusion website.

Source: bariatricfusion.com

So why are convo pop-ups so cool? They help make things personal without being annoying. Plus, they allow brands to show you stuff you might like later. 

And real talk – they work. Miracle Mink Hair got 38,000 bits of info monthly and made $154,000 with just one of these pop-ups. 

9. Product recommendations 

Businesses can effectively leverage zero-party data through personalized product recommendations, a strategy often seen in online shopping platforms.

For instance, incorporating features like “customers also bought” or “you may also like” suggestions allows customers to express their preferences through clicks.

Several brands use this strategy, and Logitech is one of them. It makes the office setup shopping experience personal and seamless by understanding what matters most to their customers. For some, it could be the feeling of comfort, for others it could be the quality and durability of the products.

Logitech's online store asking customers questions to understand what matters most to customers.

Source: st.smartassistant.com

This approach enhances customer shopping and enables businesses to collect valuable zero-party data. By implementing similar strategies, brands can refine their marketing efforts and offer more personalized recommendations based on customer preferences.

10. Social media polls

Do you know what’s super easy and practical to get info from your customers? Polls! It’s like asking them directly, but online. Think A/B testing, but you’re just getting their opinions.

Twitter and Instagram are the cool spots for this. People love engaging with companies on social media, like 20-40% more than any other platform! For brands that sell straight to customers, these polls are gold.

ASOS is a global online retailer that engages its audience by conducting weekly polls that offer a charming voting experience where users can express their likes and dislikes. Simultaneously, ASOS relies on these polls to inform its inventory by gauging the popularity of various items.

11. Product demo and onboarding

If you have a new product or service, offering a demo or free trial gives customers a chance to tell you all about themselves. 

Onboarding forms are another great approach to collecting zero-party customer data. When new users sign up for your service or create an account on your website, you can ask all your questions to quickly learn about them and their needs. The next time they visit your site, they’ll be delighted that it’s customized just for them.

Spotify is a good example here. They have a simple onboarding process. Customers answer a couple of questions they’re good to go.

Spotify's simple onboarding process are a great way to collect zero-party data.

Source: Spotify.com

12. Reviews and UGC

Last but not least, encourage your customers to leave reviews and share user-generated content (UGC). People trust word-of-mouth recommendations from their peers more than brand advertisements. So, by collecting reviews and UGC, you’re gathering valuable zero-party data straight from your target audience. 

You can also use these reviews and UGC in your marketing materials to show potential customers that real people love your products or services. 

Source: Meltwater.com 

Loews Hotels introduced the #TravelForReal hashtag in 2015 to create more authentic marketing.

Five years later, they refreshed the campaign with #WelcomingYouLikeFamily to again showcase the real guest experience. In return for letting customers feel seen, Loews collects zero-party data for marketing materials and lets customers feature in professional ads. 

So. You know how to collect zero-party data and all its fun benefits, but now we need to talk about the difficulties associated with zero-party data. 

Challenges and risks with zero-party data

There is always a risk involved when collecting and utilizing customer data. Here are some of the challenges and risks associated with zero-party data:

Customer privacy 

It’s not easy to strike the right balance between providing personalized experiences for customers and respecting their privacy.

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On the one hand, customers may appreciate personalized recommendations and targeted offers based on their preferences and needs.

On the other hand, they may feel uncomfortable sharing too much personal information and fear companies like yours will abuse it.

Data security threats

The worldwide average data breach cost in 2023 was $4.45 million, a 15% growth over three years. Businesses face this dangerous risk when collecting and storing zero-party data. 

With increasing cyber threats and sophisticated hacking methods, companies must protect their customers’ personal information with comprehensive security measures. A data breach harms the trust between a business and its customers and has financial implications through penalties, legal fees, and reputational loss. 

Regulatory navigation

Zero-party data requires you to navigate constantly changing privacy regulations and laws. You have to make sure you collect, use, and store all data in compliance with regional and international laws such as GDPR and CCPA. Failure to do so can result in hefty fines.

Combatting data fatigue

Imagine going to a buffet with endless options, and your plate is already full before you even get halfway through. Similarly, customers can experience “data fatigue” when bombarded with too many requests for information. 

Businesses must be mindful not to overwhelm customers with endless surveys or requests for personal details. Too much data collection can lead to frustration and resistance, causing customers to disengage or provide inaccurate information.  

Integration with existing systems

Businesses often have established processes and technologies, and introducing zero-party data requires careful integration. 

Ensuring that the zero-party data aligns with your current customer databases and analytics tools is essential for a cohesive and efficient operation. Smooth integration guarantees you can take advantage of zero-party data’s full potential without causing disruptions or inconsistencies.

Large dataset management

Handling large volumes of zero-party data calls for robust management systems. As you collect more information directly from customers, you need effective tools and strategies to organize, store, and analyze this data efficiently. 

Large dataset management involves implementing scalable infrastructure, employing advanced analytics, and maintaining data quality. This sets you up to derive meaningful insights from the abundance of zero-party data without drowning in a sea of information.

Best practices to gather and use zero-party data

To harness the power of zero-party data effectively, businesses must employ strategic and ethical methods for collection.

This section explores key practices aligned with business goals to ensure optimal utilization of this valuable resource.

Align data gathering with business goals

Keep your data lined up with your goals – that way, your business and data move in the same direction.

Organize data repository for new entries

Imagine your data is moving into a new neighborhood – give it a comfy spot by organizing your data repository.

New entries get a warm welcome, and you can find what you need without rummaging through the attic. A well-organized data space is like a well-decorated home – it just feels good.

Ensure value exchange with customers

No one likes a one-sided relationship. Ensure there’s a fair exchange of value with your customers. Value exchange is like a good old barter system – both parties leave feeling like they’ve gained something awesome. Take BLK & BOLD, for instance. 

Blkandbold offering 15% off on the first order and in return taking basic information.

Source: Blkandbold.com

They offer 15% off on the first order and in return just ask for some information. 

Foster trust through transparency

Be the trustworthy pal everyone wants. Share what you’re up to, be transparent about data practices, and build a relationship founded on honesty.

Empower customer choice in data sharing

Let your customers feel like they’re in control. Give them the power to choose how much data they want to share. 

Enhance UX for seamless information exchange

Make the journey easy and breezy for your customers. A seamless UX is like a well-paved road; it makes the journey enjoyable and stress-free.

Future of zero-party data

In the world of using data to make decisions, zero-party data is becoming essential for businesses, especially with the challenges of not having cookies. This data type will be crucial for training AI systems and improving artificial intelligence.

Companies will benefit significantly from using machine learning and AI tools to understand big data sets. This helps them find crucial patterns and trends in customer behavior. 

This data-driven approach will improve marketing strategies, allowing businesses to predict customers’ wants and build stronger connections with them. Because traditional cookies are not as useful anymore, marketers must work together and share what they know to navigate this new situation well. 

Once businesses start using zero-party data, there are many possibilities. It will help create personalized marketing experiences, improve advertising, and increase customer engagement and loyalty. The insights from this data will lead to better messages, targeted campaigns, improved products, and better website experiences.

In the future, zero-party data will change how AI-generated content works. With tools like ChatGPT, users will be able to customize the AI’s output to fit their needs. This will bring personalized AI-generated content that is different from generic outputs. 

Zero-party data will give businesses much information on how customers react to extra offers and related products. This data-driven approach will help businesses improve their strategies for selling more to customers based on what they like.

Besides, businesses will divide customers into groups to target them better. This way, they can make sure that efforts to sell more are tailored to what different groups of customers want.

Overall, it’s clear that zero-party data is here to stay and will shape the future of marketing in a significant way.

Ever wondered how to identify and prioritize sales-ready accounts effectively? Dive into the world of buyer intent data and boost your sales efforts!

Edited by Aisha West

منبع: https://learn.g2.com/zero-party-data