What on earth is 'Zero Party Data'? (Clone)

Boyd Wason

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24 January 02024

167A9531

In today’s digital landscape, data is king. Companies are constantly collecting and leveraging data to better understand their customers and improve their marketing strategies. However, with the rise of data privacy concerns and regulations, the way companies collect and use data is changing. In this comprehensive guide, we’ll explore what zero party data is, why it’s important, and how it can benefit your business.

What is zero-party data?

Zero party data is information that is intentionally and proactively shared by customers with a company. Unlike first-party data, which is collected through interactions with a company’s website or app, zero party data is given directly by the customer. This can include preferences, interests, and other personal information that the customer willingly shares.

Zero party data can come in many forms, including:

  • Surveys or questionnaires

  • Preference centers

  • Subscription preferences

  • Feedback or reviews

  • Polls or quizzes

  • User-generated content

  • Loyalty program information

  • Personalized product recommendations


How is Zero-Party Data different from First-Party Data?

First-party data is the information that your business collects directly from interactions with customers on your own channels. This includes:

  • Behavioral Data: How customers interact with your website or app, like page views and purchase history.

  • Transactional Data: Records of customer purchases, returns, or other transactions made directly with your business.

  • Engagement Data: How customers interact with your emails, social media posts, or customer service.

Unlike zero-party data, which is explicitly provided by customers (like preferences or feedback), first-party data is gathered through their actions and behaviors on your platforms. It's valuable for understanding customer habits and improving their experience with your brand. 

Practical Example of First-Party Data Collection

To better understand the distinction between first-party and zero-party data, let's consider a common scenario in e-commerce. During the checkout process on platforms like Shopify, WooCommerce, and most other e-commerce applications, first-party data plays a crucial role. This data, which may be stored in your browser or captured by the platform from previous purchases, is essential for a fast and smooth transaction.

 

With a product like CommercePro, checkout details are generated directly from the CRM data input by the user or loaded by someone within the business. This includes information such as billing and shipping addresses, contact details, and purchase history. It's a seamless process that enhances the customer experience by utilizing data the company has already gathered through customer interactions.

Now, this process also opens up opportunities for collecting zero-party data. During checkout, businesses can request additional information from customers, such as product preferences, feedback, or future shopping intentions. This voluntary sharing of data by customers adds to the pool of zero-party data you hold. Unlike first-party data, which is collected through customer interactions with your site or app, this zero-party data is proactively and intentionally shared by customers, offering deeper insights into their preferences and needs.

 

Why is Zero-Party Data important?

 

One of the main reasons why zero party data is important is because it puts the ownership of data back into the hands of the customer. With the rise of data privacy concerns and regulations like GDPR and CCPA, customers are becoming more aware of the data they share and are demanding more control over it. By proactively sharing their data, customers are empowered to choose what information they want to share and with whom.

Zero party data is also valuable because it is more accurate and relevant. Since customers are intentionally sharing this information, it is likely to be more accurate and up-to-date compared to third-party data. This allows companies to have a better understanding of their customers and create more personalized and targeted marketing strategies.

By giving customers a voice and allowing them to share their preferences and interests, companies can build stronger relationships with their customers. This can lead to increased loyalty and trust, as customers feel like their opinions and preferences are valued.

 

Best Practices for Using Zero Party Data

Be Transparent and Respectful

When collecting zero party data, it’s important to be transparent about how the data will be used and to respect the customer’s privacy. This can help build trust and ensure compliance with data privacy regulations.

Use Data Responsibly

Companies should also use zero party data responsibly and only for the purposes that the customer has agreed to. This can help maintain a positive relationship with customers and avoid any potential legal issues.

Continuously Update and Refresh Data

Since zero party data is given directly by the customer, it is important to continuously update and refresh this data. This can help ensure its accuracy and relevance, and provide the most value for your business.

 

Summary

As we advance into 2024, zero-party data is not just a trend but a necessity for brands focusing on personalization and customer-centric strategies. By prioritizing zero-party data, marketing directors can build stronger relationships with their customers, achieve better targeting, and stay ahead in the competitive digital landscape. Embracing this shift will be pivotal in harnessing the true potential of consumer data while respecting privacy and building trust. Ready to start strategising for 2024? Contact Engaging Partners today!

Engaging Partners team

We think tech, but speak human