Zero-Party Data: What Is It and Why Do You Need It Now?
Brands can now collect more data than ever before, leaving consumers often feeling like Big Brother is watching them. So, it’s hardly surprising that more people are becoming increasingly aware of digital privacy.
But, as we all know, data collection isn’t all bad. It allows you to deliver personalised and relevant experiences to consumers. This can lead to higher engagement rates and increased loyalty as users feel more understood and seen by the brands they interact with.
In a data-led world, there are various ways that you can harness the power of personal information. Most recently, there has been a noticeable rise in the collection of zero-party data.
But what exactly is it? We’re decoding everything you need to know about zero-party data and why it plays an integral role in any marketing strategy.
What is zero-party data?
While the term zero-party data might seem relatively new, it was actually first used by Forrester Research in 2018. Zero-party data refers to personal information that is proactively shared with a brand by a consumer.
This can include:
- Preference centre data
- Purchase intentions
- How a user wishes to be recognised by a brand
A recent study by Jack Morton found that 48% of consumers are willing to share their personal data to drive better experiences.
Zero-party data vs other data types
First-party data
First-party data is obtained directly through your website or app, social media, emails, and sms channels. It generally covers visitor behaviour such as viewed pages, browsing time, and purchase history.
As the data is collected by you and not an external source, first-party data is seen as being more accurate and reliable. However, it can sometimes be tricky to collect as more people become conscious of their privacy online.
Second-party data
Second-hand items are a great way to give previously new items a new lease of life. Second-party data works in a similar way and is first-party data that has been shared or sold by another organisation.
This data is usually obtained via a direct partnership or data sharing agreement between two organisations. It’s an effective way to enhance first-party data and also identify like-minded audiences.
Third-party data
As the name suggests, third-party data is collected by a third party and not directly from your own business or audience. This is typically collected by an external source and then sold via data exchange platforms.
While third-party data is a great tool to target specific audiences and demographics, it does come with limitations. Concerns have been raised about the quality of third-party data with issues around accuracy and privacy.
The price of acquiring this type of data can also be high, meaning it may not be the most cost-effective way to obtain data.
Different ways to collect zero-party data
There is a range of methods available to collect zero-party data, some of which you might already even be doing.
Forms and surveys
Using forms and surveys is a great way to collect detailed data on customer experiences to shape future personalisation.
For example, post-purchase surveys can help you to learn more about the quality of your products or services. As well as providing valuable insights, it also builds consumer trust as customers feel that their opinion matters.
Quizzes
Who said that data collection has to be boring for everyone involved? No-one. If you are looking to introduce more fun and increase engagement, quizzes can do exactly that.
They can help you to understand the types of products customers are in the market for and contribute to richer personalisation.
Preference centres
The number one tool you should be leveraging for zero-party data collection is preference centres. It gives customers complete control over interactions with your brand including communication preferences.
This information is invaluable as it allows you to engage with customers on their terms. Which in today’s digital age is increasingly important for engagement and retention.
How can zero-party data be used?
Using zero-party data can unlock a whole host of benefits in your marketing plans. It can help you to deliver hyper-personalised experiences, including:
- Personalised messaging
- Product recommendations
- Tailored promotions and discounts
It can also help to shape the future direction of your products or services to nurture lasting customer relationships.
Why you should be collecting zero-party data
Zero-party data carries many advantages over its other data counterparts.
Unlike second and third-party data, it's considered more accurate as data has been proactively shared. This gives consumers control over shared information and reduces the risk of privacy concerns. It also allows you to boost engagement by personalising customer experiences to individual needs.
Looking to utilise zero-party data as part of your marketing strategy? Look no further than SaleCycle. We can help you to unlock deeper personalisation and drive more meaningful customer interactions. Get in touch with us today to find out more.
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