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The term “Zero-party data” was only coined in 2020, by Forrester, which makes it a relatively new concept in the marketing world. It refers to information that consumers willingly and proactively share with businesses or organizations. Unlike first-party data, which is collected by observing a user’s actions or interactions with a company’s products or services, zero-party data is explicitly provided by the individual. This data is typically given in exchange for personalized experiences, product recommendations, or other benefits.
A recent Forrester report estimated that in 2021 a mere 15% of global brands will be collecting zero-party data. In contrast, 92% of marketers surveyed said they believed preference data is critical to their growth. Based on these findings, it’s clear that zero-party data is an area of missed opportunity for many brands as it offers unique benefits:
Zero-party data is highly valuable to businesses because it offers deeper insights into consumer preferences, interests, and intentions, allowing for more personalized and targeted marketing strategies. Additionally, since consumers willingly provide this information, it often comes with a higher level of trust and transparency compared to other types of data. This can help businesses build stronger relationships with their customers while also respecting their privacy preferences.
Zero-party data has been gaining significant attention in recent years, and its importance continues to grow in the realm of digital marketing and consumer insights. Several factors contribute to the increasing interest in zero-party data:
With growing concerns about data privacy and regulations like GDPR, CCPA and the uptick in state-level privacy legislation, businesses are seeking ways to collect data in a transparent and consent-driven manner. Zero-party data allows consumers to willingly share information, ensuring compliance with privacy laws and fostering trust between brands and consumers.
As consumers demand more personalized experiences, zero-party data provides valuable insights into individual preferences, interests, and behaviors. This enables businesses to tailor their products, services, and marketing messages to meet the unique needs of their audience, ultimately driving engagement and loyalty.
Zero-party data is often more reliable and accurate than other types of data, such as third-party data obtained from external sources. Since consumers provide this information directly, there’s less room for error or misinterpretation, leading to better decision-making and more effective marketing campaigns.
Businesses that effectively leverage zero-party data have a competitive advantage in the market. By building deeper relationships with customers and delivering more relevant and personalized experiences, they can differentiate themselves from competitors and drive business growth.
Zero-party data puts the customer at the center of the data collection process, allowing businesses to better understand and serve their audience. By respecting consumers’ preferences and offering value in exchange for data, businesses can strengthen customer trust and loyalty over time.
Brands capture zero-party data in a variety of ways:
Subscriber preference centers help marketers improve the relevance of their communications and ensure the brand is communicating at the right frequency. Data typically collected through preference:
Brand Example: Forever 21 Forever21 gives subscribers an easy way to control what product information they receive and how frequently they hear from the brand.
Consumer feedback today is amplified by technology advances that make it easier than ever to solicit feedback, giving marketers a more accurate picture of consumer expectations. Questions to ask in a feedback include:
Brand example: Bank of America Bank of America (BoA) sends 90 million email surveys to its customers per year and receives more than 12 million responses, providing real-time feedback to their teams through a customer interaction technology called Voices which automatically sends survey results to a dashboard for easy viewing.
In addition to email surveys, BoA also collects customer feedback through their digital assistant, Erica, which handled 50 million interactions in its first year of deployment. The brand’s focus on consumer feedback seems to have paid off, in JD Power’s 2019 U.S. Retail Banking Advice Study, BoA took the top spot in satisfaction with financial advice and increased their score by 26 points.1
Social media polls can be a unique way to both connect with consumers and gauge sentiment or interest from your audience. With some creativity brands can pack a one-two punch – gathering useful information about their audience while increasing their social media appeal.
Brand example: The Zebra The Zebra, an online insurance marketplace where consumers can browse real-time quotes from insurance providers, created a survey to conduct a playful investigation into drivers’ biggest parallel parking fears and found that nearly half of U.S. consumers admit to having “parallelophobia.”2
Brands use zero-party data to create real business results, for example:
Having direct data from consumers about what they want and how they behave can help companies improve customer experience and brand communications.
Brand example: Geico On the Geico Living site, the brand uses quizzes on a variety of insurance-related topics to both educate and entertain consumers and to collect valuable intelligence about customer and prospect behaviors and values.
Asking your audience how often they’d like to hear from you helps boost engagement, avoids email fatigue (because of too frequent communications) and prevents missed connections (because of communications that are too spaced out).
In addition, asking consumers how they’d like to be contacted helps identify their channel preference and avoid wasting marketing dollars on ineffective campaigns. Email preference centers can have the added benefit of reducing deliverability issues and spam complaints, given that consumers are more likely to consistently open messages they expect (since they’ve shared their preferences on frequency.)
Brands can create personalized campaigns based on consumer-reported details on their values and preferences.
Brand example: HSBC HSBC created an innovative, interactive acquisition campaign for younger consumers in Singapore to drive awareness for four different credit cards. The “Choose what you Love” campaign encouraged users to complete a quiz with lifestyle questions. Each consumer then received a completely personalized song and music video based on their details and quiz answers, along with additional real-time datapoints like the time, date, local weather and Facebook details if users granted permission for access. The music video concluded with a highlight of the HSBC credit card type that fits the consumer’s lifestyle.
Brands can use self-reported product interest and preferences to create more effective retargeting and acquisition campaigns.
Brand example: Boden Boden used zero-party data to improve their Facebook campaign results. To collect self-reported data from their audience, the brand launched a mobile lookbook for a new clothing line which asked consumers for their favorite items, style preferences, and other self-declared datapoints on buyer intent. They used the data to create custom lookalike audiences, and then tailored the creative, messaging, and clothing for each segment in a remarketing campaign on Facebook. The campaign drove a 10X return on ad spend, a 50% increase in conversions and 33% larger cart sizes than previous remarketing campaigns.
When you gather information directly from customers, you have the power to understand their experiences from their viewpoint. Brands can use zero-party data from surveys to make improvements to customer experience.
Brand example: A payments company wanted to enhance their ability to resolve customer disputes about charges on their account. They were considering making extensive investments in technology to help the company reduce processing times. However, after soliciting direct customer feedback through surveys and customers interviews, the brand discovered that their customers’ major pain point was the lack of status updates during a dispute, not the processing times. The company was able to improve their communications during the dispute process, making a greater impact on their customers’ woes at a much lower cost than an unnecessary technology overhaul.3
Zero-party data is considered a valuable asset for businesses looking to enhance their marketing efforts, improve customer experiences, and navigate the evolving landscape of data privacy and consumer preferences. As a result, it remains a hot topic in the industry, with many companies exploring ways to leverage this type of data effectively. Want to know more about data types? Sign up for our newsletter and get articles like this delivered right to your inbox!
1 https://thefinancialbrand.com/84792/banking-consumer-feedback-bofa-customer-experience/ 2 https://www.thezebra.com/resources/driving/parallel-parking-fear-survey/ 3 https://www.mckinsey.com/industries/financial-services/our-insights/managing-a-customer-experience-transformation-in-banking
As Content Marketing Manager, Natasia is responsible for helping strategize, produce and execute Data Axle's content. With a passion for writing and an enthusiasm for data management and technology, Natasia creates content that is designed to deliver nuggets of wisdom to help brands and individuals elevate their data governance policies. A native New Yorker, when Natasia is not at work she can be found enjoying New York’s food scene, at one of NYC’s many museums, or at one of the city’s many parks with her two teacup yorkies.