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.

What Is Zero-Party Data?

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:

• Quora asking about the topics that interest users to provide a more curated feed as they browse the site.
• Yelp prompting users to input highly specific details about their dining habits to suggest the most suitable restaurants.
• A fitness brand asking about your height, weight, and weekly physical activity to approximate the ideal calorie intake needed for building muscle.

Zero-Party Data: Why It’s Important

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:

• Customer segmentation.
• Personalization to offer targeted deals and offers.
• Creating curated experiences that suit individual customer needs or desires.
• Increasing customer interaction with brands on websites and eCommerce platforms.

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.

Zero-Party vs First-Party vs Third-Party Data

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.

First-Party Data

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:

• The amount of time a person spends on a webpage.
• On-page behavior such as where the mouse hovers, scrolling, and clicks.
• What users focus on and engage with the most on a certain page or within an app.
• Transactional data such as purchases and number of downloads.

First-party data gives brands an idea of what interests users on their platforms and a clearer picture on user intent.

Third-Party Data

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:

• Data that a website or company collects from users even while they browse other sites.
• Data that businesses purchase or acquire from other sources for targeted marketing campaigns.

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.

Zero-Party Data Collection Example and Use Cases

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

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.

Social Media Polls

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.

Surveys

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.

Interactive Calculators

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.

Key Takeaways

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:

• It’s data willingly given by customers and users in return for value.
• Businesses can leverage zero-party data to segment their customers and create personalized campaigns, offers, and recommendations.
• It helps build a stronger connection with audiences and is a win-win for all parties.