Described as “the new oil” by Forbes, zero-party data is a rising solution for companies to gather valuable insights about their customer base and will likely become a gold-standard practice in the near future.
But what exactly is it, why is it important, and what makes it different from other data collection methods?
Read on to learn all that and more, as well as ways you can use zero-party data to improve your customer experience, grow your brand, and ultimately boost sales.
Zero-party data, as defined by Forrester, is data that a customer intentionally and proactively shares with a brand. This can include data around preferences, purchase intentions, personal attributes, and how individuals want a brand to recognize them.
Essentially, customers volunteer to give their details to brands in return for a better experience or offer. Common examples of zero-party data collection are:
With the rise of more stringent consumer privacy and data laws like the General Data Protection Regulation (GDPR), zero-party data gives brands the opportunity to collect data free of any risks or violations.
Since customers willingly give out their information, brands can use this data in all kinds of ways, primarily for:
Of course, customers are not giving up their valuable details toll-free. The primary driving factor behind acquiring zero-party data is the value brands offer in return.
As zero-party data continues to grow in popularity, companies will explore new and creative ways to encourage participation on their platforms to offer better deals, rewards, experiences, and personalized solutions.
We’ve gone over what makes zero-party data special, but how does it compare to other common types of data that companies regularly gather? Here’s a quick look.
Businesses rely on first-party data to gain insights into customer behavior as they navigate websites, apps, and platforms. First-party data allows businesses to know:
First-party data gives brands an idea of what interests users on their platforms and a clearer picture on user intent.
You may have seen third-party data often headline news regarding privacy laws and legislation. Both Google and Apple are taking major steps to put a stop to third-party cookies and data tracking, and as a result pushing businesses to look for better alternatives.
Third-party data is:
Ad networks use third-party data to sell targeted advertising opportunities to businesses. Advertisers also use third-party tracking cookies to collect information on a user’s interest and as a result place ads relevant to their browsing habits.
As customers entrust brands with their data, there is a countdown to quickly deliver satisfying results in return. Businesses either take the data and put it to good use or risk disappointing and losing their customers.
So what are effective ways you can collect zero-party data and make the most of it? Here are some ideas.
Quizzes are a powerful way to let customers narrow down to the right product fit. Spongellé, a personal care brand, was able to generate $250,000 in additional revenue from personalization strategies based on zero-party data.
Of that impressive sum, 26% came from quizzes that customers participated in to eventually match with their ideal fragrance.
Instagram, Twitter, Facebook, and YouTube are major platforms that allow creators and businesses to share polls with customers at no cost.
Colourpop Cosmetics used a poll to gather the opinion of cosmetic users, understand their needs, and based on the feedback, were able to launch a successful product.
On the surface, surveys are often seen as boring and a nuisance, especially when they interrupt a shopper’s experience. But with the right incentives like a gift card to participate in a post-checkout survey, brands can collect valuable data to discover new ideas or solve existing problems.
Packhelp, a leading custom packaging firm, was able to increase conversion rates on their site, evaluate existing product features, and discover new product ideas all through the use of surveys.
Whether it’s for bodybuilding or creating a personalized savings plan, interactive calculators are an incredible way to gather customer information, integrate it with their email, and offer value in return.
They are relatively easy to build or readily available to buy as widgets from marketplaces. Interactive calculators offer visitors personalized estimates and results while giving you valuable details you can use to segment your target audience.
Zero-party data is part of the growing trend toward more interactivity on the web, increased personalization, and greater user participation. When used sparingly and with a sound strategy, zero-party data gives businesses an incentive to explore strategies that encourage interaction to gather key insights about their product and customers.
The main highlights of zero-party data are: