Zero-party data – Why every marketer needs to have a plan for it…

If you’re in the world of marketing, you’ll be more than comfortable with data – 1st, 2nd and 3rd party data, how to use it, how to get value from it and how much to pay for it… But what about zero-party data? This is cropping up more and more with my clients.

What does it mean?

Is it data I don’t pay for?

Or

Is it a fancy and exciting way of referring to “First-Party Data?”

Or

Is it something entirely different?

Don’t worry if you don’t know anything about this tricky term, in this blog post, not only will we take a brief look at what zero-party data really is, but we will be learning why it’s really important in today’s era. And that’s not it. We will also be taking a look at what kind of change it will bring in the digital world.

What’s Zero-Party Data Exactly?

I believe it was Forrester who coined the phrase, here’s their definition of Zero-Party Data:

“Zero-Party Data is the kind of data that a customer proactively and intentionally shares with a brand. This might include purchase intentions, preference center data, personal context, etc.”

According to Forrester, “Brands own First-party data, whereas, in the case of zero-party data, they don’t own anything.”

Customers grant the brands the right to use their zero-party data for one purpose or another. That’s the reason brands don’t hold the right to sell the zero-party data shared by the customers without consent.

?Why Is Zero-Party Data Important In Today’s Digital World?

But how exactly does it differ from first-party data? It’s no secret that the first-party data is rich in terms of implied interest and behavioural data, but zero-party data is all about providing explicit interest as well as preferences. Brands can use it to provide value to their prospects and customers. Intrinsic customer engagement is just one of the benefits of zero-party data.

If you are a brand that uses zero-party data, then you can be assured that your consumers actually want to hear from you. They won’t be troubled when you send them an email, text, push notification, etc. Consumers are the ones willing to share their information in case of zero-party data. That’s the reason brands using zero-party data will be able to build a stronger relationship with their audience.

So, first-party data is the data that’s collected by the brands, whereas, zero-party data is subject to asking a particular customer what he/she really wants. Once the brands have a proper understanding of what a particular customer really wants, they can utilise it to deliver a personalised experience.

An example that comes to mind is Netflix, like other digital disruptors, they have been successfully using zero-party data for years. Tell Netflix you like rom-coms, true-crime documentaries, and anything with Ryan Gosling, and you’ll be served up endless hours of binge-able content personalised to you.

Zero-part data in action…

Just the other day I received the below email from McDonald’s – “Want personalised emails with the most relevant information for you?” Yes, please. Upon clicking, I was directed to a landing page where I could share information about my thoughts and feelings towards their restaurants and food. I shared this information with McDonald’s because, yes, I was writing this blog but also, I like the brand and I want them to know me better. I’m hoping for more relevant and meaningful marketing and maybe some free chicken nuggets!

What Change Will Zero-Party Data Bring In?

Privacy and Value!

The entire idea of the term “Zero-Party Data” is based on privacy and value. In the midst of brand data breaches as well as high-profile scandals, more and more consumers have raised questions showcasing their concerns regarding their privacy. They are worried as to how brands are using their personal data.

In the latest “State of the Connected Customer Report” released by Salesforce (Available Here), where they surveyed over 8,000 consumers and business buyers worldwide, they explored the growing crisis with trust. 73% of customers say trust in companies matters more than it did a year ago.

This means customers are being even more selective than they once were, 45% of customers say it’s harder than ever for a company to earn their trust. Wow, so companies will need to work very hard in providing more control to the customer, and zero-party data is a way of achieving this, it puts the power directly in the hands of the customer.

And why is this so important? Because a company’s trustworthiness is inextricably tied to its bottom line. Eighty-nine percent of customers are more loyal to companies they trust, and 65% have stopped buying from companies that did something they consider distrustful.

Done right, zero-party data can allow you to build stronger relationships with your customers whilst harbouring a culture of transparency and trust. If you don’t have a plan for collecting and using zero-party data then BUILD ONE……and do it NOW!

CRM, CustomerData, CustomerExperience, CX, DigitalMarketing, Marketing, MarketingData