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Everything You Need To Know about Zero-Party Data
By
Michael Hall
December 15, 2021

If Apple’s iOS 14.5 update threw most marketers off-guard, Google’s recent announcement that Chrome will be bidding goodbye to third-party cookie tracking in 2023 was no doubt, the final nail on the coffin.

Why was third-party data so important?

Marketers and ecommerce brands, in particular, have been heavily reliant on cookies and third-party data to personalize their customer interactions.

These announcements from the big techs to eliminate traces of third-party cookie crumbs came as a crushing blow for ecommerce marketers who base their ads and retargeting campaigns on data-driven marketing techniques.

While most of us are reeling from these recent updates, it’s time to embrace the changes (like we have a choice) and adopt a new approach for future brand interactions.

The new approach: Zero-party data

All right, this one came as a shocker — the roll-out of iOS 14.5 had 96% of users in the US opt-out of app tracking. With regulations worldwide cracking down on third-party data practices and creepy cookies, marketers have been quick to find their fix!

The breakup with third-party data has urged marketers to take a more customer-first approach and that’s where zero-party data comes in!

Zero-party data is more consent-driven, it’s the optional information that customers willingly choose to share with your business. In other words, it is the long due answer to every customer’s concern about privacy.

With customers growing wary by the day and governments intervening with regulations such as CCPA and GDPR, ecommerce businesses and savvy marketers are placing their bets on zero-party data to drive personalization in the coming years.

Credit: Marketoonist.com

What is zero-party data?

A term that was initially coined by Forrester, zero-party data is the voluntary information that a customer ‘intentionally’ and ‘proactively’ shares with your brand.

It could be basic data like an email address or phone number, product-related information like your shoe size, preferences like your favorite sports brand, or even future purchase intentions.

Let’s face it, zero-party data is a complete shift in mindset, and has forever changed the way brands collect and use customer data for their personalized marketing efforts. While there are a plethora of ways to collect zero-party data, one thing’s for certain — ecommerce brands must hop on this bandwagon right away!

Zero-party data is the voluntary information that a customer ‘intentionally’ and ‘proactively’ shares with your brand.

Start with the basics, collect customers’ names and email addresses in exchange for a monthly newsletter and never miss a chance to ask them for their preferences (many leading brands allow customers to opt for the type of content they’d like to receive).

What is the difference between first-party data and zero-party data?

With all that ongoing buzz about customer-first data and making the move from stalking to talking — there might be some confusion about how zero-party data is different from first-party data. Well, we’re here to help you get to the bottom of this.

First-party data is the information collected by a business on their owned properties, like their website or an app. It’s often termed behavioral data as it captures the customers’ behavior across your website and brand channels.

Owned by the business, first-party data is the information collected when a customer signs up to use your product (such as name or email address). This could even include web-browsing information like clicks, hovering, sessions, and the customer’s interactions with a brand’s personalization efforts. Transactional data like purchase history also falls under this bucket.

Both zero-party and first-party data are purely consent-based. So what sets the two apart?

First-party data is the required information customers provide when they interact with your brand.

On the other hand, zero-party data is the optional information that customers or shoppers choose to share with your brand in the hope of receiving more valuable and personalized experiences in the future.

While your online store is already collecting first-party data, finding new ways to capture zero-party data (without overwhelming your customers) is what remains to be conquered!

Zero-party data has arrived and here’s why it is important

In the words of Forrester’s Fatemeh Khatibloo, zero-party data is ‘gold’.

We couldn’t agree more! When a customer trusts you with their data, it just becomes a lot easier to give them just what they want and that’s exactly what zero-party data has to offer!

With more browsers phasing out third-party cookies, enabling customers to knowingly share information is more important than ever.

With the luxury of having rich customer data at your disposal, you can enjoy a world of possibilities when it comes to building personalized brand interactions.

Let’s examine some benefits of leveraging zero-party data for your marketing campaigns

Get access to better quality data

Your customers and shoppers dig personalized experiences across every channel that they interact with you on! This is why, when you’re honest in telling your customers that you need their data to provide them with richer, more personalized interactions — there is a higher possibility of them sharing that information with you.

Since this data is coming straight from the customer, it is certainly relevant and trustworthy. Simply put — you can’t go wrong with acting on this data and using it to fuel your marketing efforts.

Based on the preferences they share, you also get to know just how your customers would like you to engage with them.

The cost-effective way to collect data

Collecting zero-party data is inexpensive when compared to getting your hands on third-party data. With customers willingly sharing the details with you either on your website or any other channel, this data already exists in your systems and you need not shell out any money to get hold of it.

Win customers over with trust and transparency

With data breaches and cyber attacks making the headlines, customers worldwide have rising concerns over how brands are utilizing their data.

So what’s it gonna take?

With zero-party data, you get to gain your customer’s trust by being transparent about why you’re collecting their data in the first place! After all, transparency is the building block of mutual trust!

With over 90% of customers basing their purchase decisions on your brand’s transparency, notifying customers that their data will be safe and informing them in advance of why you need their data will keep them coming back for more!

How can you utilize zero-party data to the fullest in a cookie-less world?

Ecommerce brands and businesses, in general, are losing no time in tapping into the wealth of zero-party data.

From surveys and polls to stories with quizzes on Instagram, businesses are finding new ways to collect zero-party data. While there is a multitude of ways out there — we’ll help you with some proven techniques of putting zero-party data to the best use possible.

First things first, build a zero-party data strategy

Before you dive right into collecting data, backtrack a little bit and understand the need for data. You see the problem is not the unavailability of data but the lack of accuracy and poor quality of it!

To understand your data needs, you need to head back to the drawing board to map out customer journeys and touchpoints. Knowing this will help you chalk out a more focused strategy when it comes to collecting zero-party data strategy.

Next up, collect data that matters

So you’ve got your strategy in place and you’re planning your first move — be sure to identify the right channels where you can build immersive, engaging experiences with customers to find out all about their preferences.

  • Website: Giving your website visitors the choice to opt for the type of communication that they’d like to receive is a great way to collect zero-party data.
  • Emails: Emails are not dead — far from it. Get to know your customers by asking them to share when their birthday or anniversary is, in exchange for receiving a special discount on that day.
  • Registrations or account creation: Kick-start your personalization journey right from the time a new user registers for an account on your website or app. Create a short and fun questionnaire to find out their preferences and tailor your customer’s experience to their liking.
  • Social media polls: One of the most trusted ways to gain quick insights about customers’ preferences is using Instagram polls.
Source: Adweek

Use zero-party data to define market segmentation and build engaging campaigns

Collecting user data right from the beginning of their journey with your brand will help you identify and classify the customers into the right segment.

You can then build eye-catchy, personalized campaigns offering your customers the experience that they desire.

Make the best use of shared preferences

When customers are taking the time out to share their preferences with you, it only means that they are expecting something in return.

Don’t make the mistake of ignoring their preferences — start promoting real-time product recommendations on your Shopify store and cross-sell complementary products that they will love! Spotify, for instance, asks users to share their favorite music genre so that they can make all the right recommendations based on the user’s taste in music.

Zero-party data, the way forward

With the curtains closing down on third-party cookies, customers are now more in control of how their data will be used. That being said, the need for a personalized and engaging experience has never been more important.

In the days to come, zero-party data will revolutionize how marketers collect customer data. While you get ready to capture contextual, vital information from your customers, be sure not to overwhelm your customers with too many questions.

Ready to get started with zero-party data? Pick one thing you’d like to know about your customers, like their birthday, and build a campaign from it. Then rinse and repeat. Good luck!

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Hero photo by Mika Baumeister on Unsplash