Why Zero-Party Data is the New Secret Weapon for Brands
With all the data sources available to brands and marketers, is zero-party data actually the most valuable insight?
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If you've heard it once, you've heard it a thousand times. Big data can help you streamline your business and reach new heights. But don't get so hung up on big data that you overlook the next big thing: zero-party data.
Don't fret if you're not familiar with zero-party data. It's only been a "thing" for approximately two years, with Forrester Research coining the term in July 2020 and defining it as follows:
"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."
While still in its infancy, the brands that take advantage of zero-party data have access to a secret weapon for winning over their market and outperforming their competition.
Is zero-party data better than third-party data?
Brands have long relied on third-party data to gain consumer insights, identify new opportunities and look beyond basic surface data — and that's just the start. However, if you focus too heavily on third-party data, you could be missing out on the benefits of zero-party data.
The word "better" is subjective. And when it comes to zero-party data versus third-party data (among other types), there's no right or wrong answer as to where you should spend your time, money and resources. The one thing you should do, however, is avoid focusing entirely on third-party data, thus missing out on everything that zero-party data has to offer.
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One of the primary benefits of zero-party data is that it's more trustworthy than third-party data. This is the case because customers willingly share it with a brand, knowing that they'll use it for everything from sales to marketing to creating personalized experiences. If a consumer is willing to share their data with a brand, it's safe to assume that they trust that it will be used responsibly.
Another benefit of zero-party data is its accuracy. Once again, this is related to how the data is collected. Since it's shared directly by consumers, it's naturally more accurate. There's less chance of an error that could spoil your sales, marketing and advertising strategies.
It's also worth noting that zero-party data is generally more engaging. It can be used to create personalized customer experiences, which results in greater engagement and enhanced customer loyalty.
And finally, zero-party data reduces the guesswork when customizing consumer experiences. You're no longer hoping that you're providing a customized and personalized experience. You have the data to back up every move you make. With less guesswork, you're saving yourself time and money.
Related: 3 Trends to Keep Customers Engaged in 2022
How to arm yourself with zero-party data
In today's world — a world where consumers have access to more technology than ever before — there's no shortage of opportunities to collect zero-party data.
And that's important because zero-party data is only a weapon if you know how to collect it. Since you're directly asking consumers to share data, your options include but are not limited to email, text message, forms, surveys and quizzes. And remember: You don't have to get technical. Give your audience a simple way to share data, such as an online form or quiz. The more experience you gain, the more you'll come to understand what resonates with your audience.
Email marketing campaigns open up a world of opportunities regarding data collection. You can send customers a survey to gauge their interest in and feelings about your brand, products and/or services. You can integrate a quiz into your welcome email sequence, which is both engaging and insightful. You can send a text message shortly after a customer makes a purchase. Get creative to entice consumers to share data and to set yourself apart from others.
Related: Data in 4 Flavors, and the Demise of the Cookie
A pop-up is another option. For example, display a pop-up on your site that asks two or three simple questions. In exchange for sharing data, provide the user with something of value, such as a personalized shopping list or a coupon code for their next purchase.
And perhaps the easiest way to collect zero-party data — if applicable to your business — is during the registration and/or onboarding process. This is an opportunity to ask for basic personal information such as name, email address and phone number. It's also a good time to collect demographic information ranging from gender to age to location.
With this approach, you can also ask individualized questions related to your product. For example, if you're selling a human resources software solution, you could ask new customers about their experience with competitors, goals and how often they plan to use the application.
Privacy laws are making it increasingly more difficult for brands to collect data, especially with consumers treading lightly with their online safety and security in mind. All of this will drive the near-term, rapid growth in the popularity of zero-party data collection.