How to Collect and Use Zero-Party Data for Updated Marketing Strategy

With third-party data being phased out, it's time for marketers to embrace a more reliable source of data

In the world of marketing in the internet age, yet another shift is taking place.

Marketers have gotten used to relying on third-party data to gain more intel on their target audience, but those days are numbered. In recent years, privacy regulations like GDPR and CCPA/CPRA have been enacted in response to consumer calls for more data privacy and control.

Add to that the loss of third-party tracking thanks to Apple's iOS 14.5, and the phasing out of third-party tracking cookies in Google’s Chrome browsers, and the race is on to find new sources of customer data.

Enter Zero-Party data.

Let’s start by defining our terms and explaining the differences.

What is Zero-Party Data?

The term “zero-party data,” first used by Forrester Research, is defined as “Data that a customer intentionally and proactively shares with a brand, which can include preference center data, purchase intentions, personal context, and how the individual wants the brand to recognize her.”

This is in stark contrast to the more-common third-party data, which is collected by multiple companies, aggregated, and then re-sold to numerous companies.

Third-party data can raise questions about accuracy (since data decays at up to 70% a year), possible concerns about how it was initially collected, and how many competitors bought the same data.

While today’s web-savvy customers have privacy concerns, they also want more personalization. Customers have indicated they are willing to provide their data to companies that use it responsibly, in exchange for a more personalized experience. Zero-party data manages to satisfy these conflicting demands.

Zero-party data ultimately benefits both the customer and the company: The customer has consented to provide this data, so it is trustworthy (depending on how honest the customer is willing to be) rather than based on inferences. Plus, it doesn’t run up against privacy laws since the customer volunteered the information.

In addition, it helps the company because now they have fresh data that can (and should!) be used to personalize their customer’s experience, delivering the personalization they demand.

What kind of data should you collect, and how should you collect it?

The specifics for the types of data you should collect will vary from industry to industry, but will all have the same guiding principle: what data will provide the most value to the customer?

Remember, the customer is signaling that they trust your company enough to provide this data directly, so be focused on the types of data you need to provide the best experience in return.

Rule #1: Keep it brief

There are a few different ways of collecting data, with surveys, quizzes, and polls being the most popular. You don’t want to ask for too much, or you run the real risk of getting nothing. Too many invasive questions will cause your customers to simply click away.

Focus your questions on data that will personalize content, provide product recommendations, or achieve a specific business goal.

Rule #2: Be transparent

Tell your customer why you’re asking these questions. It can be as simple as “Please complete this brief survey so we can provide recommendations best suited to you.”

Give them reasons to trust you, use their data responsibly, and they’ll reward you with loyalty.

Rule #3: Let the customer change or remove their data

If you allow the customer to change their preferences, it further builds on that trust (and also keeps you from hearing from GDPR and CCPA/CPRA enforcement).

It also allows them to keep their data updated and accurate. The reason a customer had to visit your website initially may change over time, depending on their life circumstances, tastes, or whims. Be prepared for these changes.

Rule #4: Make sure you can use the data

This is an excellent time to evaluate your data silos and break down the barriers between them if you haven’t already.

If the data you’re collecting is going into your CRM, be sure that your marketing automation platform can also use the data.

Your customer is expecting personalization in return for entrusting you with this data, and it’s a remarkably effective way to segment your audience based on the information they are providing you.

After all, what’s the point of collecting all this valuable data if you can’t put it to good use?

Zero-party data represents an excellent opportunity for marketers to collect and use accurate information to reach customers on their terms. And when zero-party data is paired with AI, the possibilities grow exponentially.

Are you ready to leverage zero-party data and AI? Take this free Marketing AI Maturity Assessment.

Have zero-party data already? Want to see how Motiva AI can leverage it?

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