In this blogpost, we'll cover:
- What is zero-party data?
- What are the differences between zero-party data and other types of customer information?
- What are the benefits of using zero-party data?
- How to use zero-party data to improve marketing outcomes
- Zero-party data - what you need to watch out for
- How to collect zero-party data compliantly
What is Zero-party data?
Zero-party data refers to data that a customer has willingly shared with your organisation. This shared data often contains details that a customer wants an organisation to know about them, such as product and style preferences or purchase influences.
By using your consent and management platform and preferences strategy to collect information in this way, you can personalize and improve the customer experience. In turn, this can encourage your customers to share information voluntarily.
There's some confusion between the different types of consumer data out there, so let's take a quick look at the characteristics and differences first.
What are the differences between First-, Second-, Third- and Zero-party data?
Consumer data can be classified into four main categories:
- First-party data
- Second-party data
- Third-party data
- Zero-party data
The key difference between these four types is their method of collection. However, it's important to identify what sets each type of data apart from the others.
Here's a quick breakdown of each type of consumer data:
| First-party data | Second-party data | Third-party data | Zero-party data |
| Data you have collected directly from your customers. | Data filtered through another – trusted – organisation, indirectly collected. | Data bought from an outside source that is not the original collector. | Data given to you directly and voluntarily by your customers. |
| Examples: website clicks, app downloads,transactions | Examples: website activity, social media profiles, survey responses | Examples: subscriptions, purchase habits, household income. | Examples: pain points, contact information, shoppinf preferences. |
|
Allows for a maintained one-on-one connection with customers. New data-backed messaging boosts sales. |
Diversifies and expands your dataset. Helps to increase reach and acquire prospective customers you may have missed out on in the past. |
Builds a better understanding of your customers and improves targeting. Helps to identify the best prospects, based on advanced analytics. |
Privacy-protected, because data is voluntarily shared. Trustworthy and definitive, as it is collected directly from the data subject. |
Now that we know how the four types of consumer data differ from each other, let's explore how you can use this data in your business.
Why is Zero-party data beneficial?
Zero-party data contains far more personal information than email addresses and location histories. It gives you an insight into what really makes your customers tick. Their pain points and needs, their preferences and motivations. It also contributes to its biggest benefit – more relevant and personalized recommendations and campaigns.
Tailor-made marketing messages are more likely to result in purchases, thereby improving sales and building a more trusting relationship with customers. Zero-party data also brings to light the concept of explicit consent and its necessity for processing sensitive data.
How to use zero-party data to improve marketing outcomes
Let's dig into these in a little more detail to explore how you can nuse them to get better results.
Reducing opt-outs by improving trust
When customers willingly share their information, it signals a trust in your brand—a trust you can further build on by using their data responsibly. This approach honors their preferences and significantly reduces the likelihood of opt-outs. It's simple: when customers feel heard and respected, they stay engaged. By prioritizing transparency and consent, you're not just 'collecting data' like some automated entity—you're well on the way to building a loyal community.
Zero-party data is personalization powered by permission
Reaching an audience is easy, resonating with them is hard. But zero-party data can help you unlock a new level of personalization that goes beyond generic demographics. Armed with direct insights into customer preferences and desires, your marketing teams can tailor their messaging, offers, and experiences at new levels. And it isn't guesswork. It's precision targeting, with every campaign informed by data freely given. The result? Messages that feel like you've crafted them just for the individual and content that starts to feel more like a conversation and less like a sales pitch.
Driving revenue by turning insights into action
Zero-party data gives you extra powers of prediction. If you understand your customers' direct preferences and intentions, you can anticipate their needs and present opportunities and products that align with their interests. And by giving prospects more of what they want, you're increasing the likelihood of conversion and setting the stage for upselling and cross-selling opportunities. It's the ultimate win-win: your customers feel understood and appreciated, and your bottom line gets a boost.
Using zero-party data to create a competitive edge
The advantages of zero-party data extend beyond the core benefits of reducing opt-outs, boosting engagement, and driving revenue. In a crowded market, it can help provide a distinctive edge and position your brand as a leader in customer-centric marketing. It also informs not just campaigns but product development, customer service, and overall strategy - creating a feedback loop that continually enhances the customer experience
Are there any disadvantages of using Zero-party data?
Since customers are expected to release data voluntarily, zero-party data can sometimes come with challenges. For example, the longer your questionnaire or survey is without an appropriate value exchange, the less likely customers are to answer all questions.
It might not always be accurate data, either. In some cases – such as answering a survey to access gated content – customers may simply enter inaccurate or dishonest information to speed up the process.
Collecting this data also requires a proactive and engaging approach to ask customers to share their information voluntarily which can slow you down. Additionally, maintaining the relevance and accuracy of zero-party data hinges on continuous engagement and updates, as your customer's preferences can evolve.
This means marketing teams must invest in strategies and technologies like consent management platforms that help facilitate an ongoing conversation with customers. Despite these considerations, the advantages of zero-party data—enhanced customer trust, improved personalization, and compliance with privacy regulations—often outweigh the challenges for forward-thinking brands.
How do you collect and use Zero-party data that complies with GDPR?
You can collect zero-party data in a number of ways. Interactive experiences are most effective, such as:
- Surveys
- Quizzes
- Social media polls
- Pop-ups
- Contests
- Registration forms
Registration forms are sa great way to gather zero-party data, all while staying compliant with GDPR. Even better, by championing explicit consent, you're not just ticking off compliance checkboxes - you're actively engaging in a transparent conversation with your customers and letting them know your'e collecting their information with care and consideration.
But why stop at mere data collection? Elevate the experience by linking zero-party data gathering to enticing rewards—think contest prizes, exclusive content, or VIP event access. This strategy can encourage customers to share insights and puts 'value exchange' front and center. Whether it's through emails, in-store chats, or even dynamic digital platforms, every interaction is an opportunity to deepen customer relationships.
You can then use zero-party data to craft dynamic websites, personalized newsletters, and conduct in-depth market research that will more likely resonate with people.
Conclusion
As with any marketing or data-collection tool, zero-party data has its advantages and disadvantages. It's most useful for its role in developing relevant and personalized campaigns and reducing our reliance on third-party data.
People give it to you voluntarily and it enables cookie-less tracking and the combination of consent receipts and marketing preferences.
Want to learn more about the best ways to collect data like this in accordance with regulations? Speak to one of our consultants about achieving data protection compliance.
