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First-Party and Zero-Party Data: The Path Forward

The last few years have imposed a lot of heavy acronyms imposed upon marketers. GDPR, CCPA, and IDFA to name a few. All three of these drive consumer privacy and data protection regulation as consumer awareness and concerns mount.  

With Google announcing a cookieless future adding further complications to the mix, marketers will have to lessen their reliance on third-party data and increase their collection and activation of first-party (data given implicitly by customers) and zero-party data (data given explicitly by customers).

Understandably, this puts added pressure on marketers working under limited time, resources and budget. 

But this, arguably, is a great opportunity for everyone. First- and zero-party data are usually more accurate and truthful than data collected externally, as they come directly from the customer. What could be more relevant than information straight from the source?

Meeting Heightened Expectations With Data

Many brands were already on a path to greater customer-centricity, but COVID and social unrest have put a heavy foot on the accelerator and made this shift an imperative. Brands will be challenged to drive a customer experience that meets growing expectations of individualization. 

To keep pace, brands must understand the evolving definitions of “value” and “experience” as differentiating factors, understand how individual customers define and prioritize those qualities relative to themselves, and then personalize and contextualize their messaging to align with what is most important to each person, while still remaining authentic to brand identity and voice. 

It takes a lot of data and insight to drive that level of personalization. 

Collecting that data transparently—and directly—allows brands to invite customers into a conversation, giving them a share of voice and a feeling of partnership.

On the other side of the coin, customers are increasingly aware of the value and power of their data, so they expect an equal exchange of personal data for personalized experiences and value. It’s a covenant.

Context Is Key

Personalizing the customer experience to meet customer expectations starts with the gathering and utilization of first- and zero-party data in context.

First-party data, such as behavior signals, will continue to play a crucial role in driving growth, but it should also be balanced and contextualized by information asked directly of, and provided directly by, the customer. 

Most marketers are well attuned to the most critical customer signals (opens, clicks, downloads, purchases, etc.) and have strategies in place to act upon these to drive more opens, clicks, downloads and purchases. 

History has shown these can be effective to elicit “responses” from consumers, but real meaningful and sustainable engagement comes when marketers understand the context, the “why” and “for what” for each customer’s actions.

The meat of a brand-consumer relationship lies in the mutual understanding of intrinsic personal motivations that are the real driving force behind the actions we take as customers. 

Zero-party data is the key to unlocking that context and delivering personalized experiences that matter. But the quality of zero-party data is often contingent upon when and how it was collected.

Making the Most of First- and Zero-Party Data

Let’s start with the “how.” 

Account profiles are usually the best method for customers to self-identify who they are and what they need, so marketers should think about adding fields to help bring more context to primary data points. 

It’s understandable to purposely choose to keep profiles slim to reduce friction and attrition of sign-up. Alleviate this worry by making additional fields optional and available for those willing to use them.

Any missing data can then be collected via other methods, such as progressive profiling in welcome/onboarding campaigns, in-app functionality, and polling via landing pages or light box pop-ups.  

Surveys and forms can also be utilized to fill profile gaps, but they should avoid sounding too formal as many customers sometimes submit responses that are more aspirational than truthful.  Asking single questions or gamifying the survey with images or humor can be effective tactics to elicit more truthful responses that result in higher relevance. 

First- and zero-party data aren’t limited to welcome and onboarding campaigns. Here are a few common collection points beyond the initial customer interactions:

  • Website
  • Mobile apps
  • Email and mobile campaigns
  • Social media
  • Digital ads
  • Video / OTT
  • In-store / In-person events
  • Customer service / Call center
  • Chatbots

The tipping point of first- and zero-party data usage is your brand’s ability to start a dialogue. Modern consumer expectations drove the traditional one-sided brand-consumer relationship into obsolescence. Today consumers want control of their data and their voice, the tactics above give users the power to dictate the level of personalization they can expect.

First- and Zero-Party in Practice

I’m a Brooks fan-boy and love their use of personalization in customizing nearly every aspect of their customer experience. From the very first welcome message, Brooks sets the expectation that it’s about the customer, not the brand, and seeks to understand more about YOU by asking who you are, what you do, and where. 

First and Zero Party Data in Practice

Brooks opens the doors for a dialogue from the get-go. Source: Really Good Emails

The customer makes their selections, the value preference is recorded in the database, and this information is then used to segment and personalize the context of content, copy, workflow and journey sequence of subsequent messages. It’s a great strategy to contextualize data points for users by placing the product (running shoes) into the eventual use case (e.g. trail running). The transparent manner in which this is done builds trust by exposing the data collection process and allowing the customer to self identify. 

Use of Zero Party Data

Deliver on promises by using the data to improve the individual experience. Source: Really Good Emails

In the subsequent email, Brooks has clearly and immediately delivered upon the customer expectation by personalizing and contextualizing the entire experience around the zero-party data provided in the preceding email. 

This individualization strategy is a critical component of the Brooks brand value. They know that you can buy running shoes anywhere, and that customers may come to Brooks for the shoes, but they stay for the value of experience, knowledge and utility that Brooks has built around the buying process, allowing runners to get more out of the product and their chosen activity.

Putting It All Together

Personalization of this kind may seem high effort, but it really needn’t be.

By changing a few simple words and images using dynamic insertion, Brooks contextualized the messaging to align with, and strum the resonant chords of each individual’s intrinsic motivations. In doing so, Brooks maintains a steady flow of intent and interaction, resulting in exponential increases in engagement, conversion, loyalty and retention.  

The value of using first- and zero-party data in context in messaging such as this really shouldn’t be underestimated. Accenture reports that 73% of consumers prefer to do business with brands who use personal info to create personalized experiences. 

You need to build relationships with customers in order to deliver a great experience. At the core of that relationship (as with any relationship) is how you communicate.  

Because they come from the customer directly, first-party and zero-party data offer the most clear and explicit communication signals on what, how, when, and where to deliver the most meaningful and relevant experience customized to each individual. Without that, we’re merely guessing, and guessing is best left to picking lottery numbers.

For more about changing customer expectations and building a relationship that lasts, check out “The Key to Crafting a Memorable Customer Experience.”

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