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What is Zero-Party Data?

Zero-party data is information the customer actively chooses to share with your brand. It includes the kind of personal details a shopper might share with a sales representative, such as what they’re shopping for, their age and gender, and the best ways to get in touch with them.

Consumers are becoming increasingly aware—and wary—of how some companies track, sell, and buy their online data and use it to target them for aggressive sales and marketing pitches. Governments are cracking down by limiting how companies can collect and use customer data. And companies, including Apple and Google, are making it easier to opt out of being tracked.

As privacy becomes more and more important to consumers, intentionally proffered information is all the more valuable to marketers. Here’s what you need to know about zero-party customer data, how to collect it, and how to put it to use for your brand.

What’s the Difference Between Customer Data Types?

Various types of customer data can be collected. One of the most important distinctions is how data is collected, and those distinctions can be a little confusing. Here we’ll explain the difference between zero-, first-, second-, and third-party data.

Zero-party data: Zero-party data differs from the other types in that it is the only one that is collected directly—explicitly—from customers who voluntarily give you their information. Examples of zero-party data include:

  • Communication preferences
  • Purchase intentions
  • Style preferences
  • Self-identifiers
  • Quiz responses

These are usually collected via surveys or user profile settings.

First-party data: First-party data is collected implicitly as users interact with your brand. It can include browsing history, purchase history, clicking and hovering behaviors, email engagements, downloads, and other actions. It can be collected automatically from all your marketing and sales channels, such as:

  • Brand website
  • Mobile app
  • Emails
  • CRM systems
  • Subscriptions
  • Social media
  • Marketing campaigns

Second-party data: Second-party data collects the same information as first-party data—browsing, purchase, subscription history, etc. The difference is that instead of collecting the data on your own platforms from your own customers, you purchase the data from another brand. The data is considered the other brand’s first-party data, which makes it second-party data to you. It’s still specific to each user, but not specific to your site or app.

Third-party data: Third-party data refers to collecting and selling customer data. Information such as demographics, location, age, income, education, sites visited, and buying signals (that is, actions that indicate a person is interested in purchasing a particular type of product) are obtained by third-party data brokers and sold to marketers in large bundles of aggregated data.

Third-party data has been extremely valuable for learning what consumers are doing online, but it’s exactly the kind of data that makes consumers wary and causes regulators to crack down. Although it is still practiced, the future of third-party data is uncertain.

How to Use Zero-Party Data

Best practices dictate that you should offer something of value to your customers in exchange for their information—and then quickly deliver on that offer. For example, completing a short survey could earn them a coupon code, or a free download. Or, you might ask them to take a style quiz and then use AI to immediately serve up a list of personalized shopping recommendations based on their answers.

Whatever you do, be sure to put your data takeaways into practice immediately so consumers can see that you care about their preferences and want to build a customer experience to match. Acting on your user’s preferences will build trust and loyalty in the long run.

Benefits of Zero-Party Data

While consumers are less willing to let anonymous companies collect and sell their personal information, they are still interested in having personalized brand experiences tailored to their likes and preferences. Zero-party data is a great way to balance customers’ determination for privacy with their desire for personalization.

You can get valuable and reliable information directly from customers, without them feeling like they’ve been “tricked” into sharing personal data. Then, you can use that information to optimize their brand experience. Other benefits include:

Reliability: Because zero-party data comes straight from the consumer, you can feel confident that what you learn is reliably true.

Longevity: As companies and governments phase out third-party tracking and cookies and more users opt out of data tracking, zero-party data offers a lasting source of customer information.

Building trust and transparency: Asking users directly for their information—instead of obtaining it secretively—instills trust in your brand and shows that you are being transparent in your data collection efforts. Plus, being overt in how you use the collected data helps to establish trust. Be sure your users know what they’re getting in exchange for their personal information–an individualized experience. Then, when customers are willing to share personal information it demonstrates that they trust your brand with their data.

Getting the Most out of Your Zero-Party Data

The data you collect is only as good as the tools you have to take advantage of it. Integrating your zero-party data into a customer communication platform, like Iterable, helps centralize your data, synthesize its meaning, and allows you to automated personalized messaging for each consumer.

With zero-party data, marketers using Iterable can determine what type of message to send each customer, the best timing for the message, and which channel to use.

Rather than reaching out randomly and having your message lost amongst the plethora of information your consumer receives, you can reach your user’s preferred messaging platform (such as email or SMS) exactly when they’re most likely to see it and interact with it.

By personalizing marketing activities to each individual, you cultivate more connections to your brand. Better yet, each new user interaction is relayed to your cross-channel marketing tool, triggering even more tailored messages.

To learn how Iterable can help your brand use zero-party data effectively to create personalized customer experiences, schedule a demo today.

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