Zero party data is the new fuel to your marketing engine. Why? Because it gives you the power to make decisions that win customers in a competitive marketplace where people are concerned about online privacy while still expecting personalized experiences.
Marketers know that good data is what keeps their marketing performance running. And they’ve known it for a long time. But recent privacy updates turned the digital marketing landscape upside down.
This is where zero party data comes into the picture, offering a new and safe way of collecting data in our privacy first world.
In this article, we break down what it is, why it is important, how marketers can leverage the benefits, and the main differences between zero party vs first party data.
Table of Contents
What is Zero Party Data
These days customers want companies to know them. Remember their names. Know their purchasing history. And they expect companies to provide them with personalized offers based on their preferences.
Still, many marketers make the mistake of approaching prospects with vague assumptions. Hunches. Ideas. Instead of discovering what they truly want.
Zero party data, also known as declared data, is information that consumers voluntarily share in a direct interaction with your business. It enables digital marketers to identify customer needs, wants, and desires. This is the information most marketers can only assume about their audience unless they explicitly collect it. This can be anything from their budget and location, to product preferences. Brands can use this kind of data to enhance their customer experience, provide tailored shopping suggestions, and deliver personalized content.
The difference between zero party and first party data
People often confuse zero and first party data. It’s no surprise as the two are similar in many ways. Both zero and first party data are collected with consent, from a direct relationship with the customer, and are highly accurate. And while both have great value to businesses, there’s an important difference between zero vs first party data.
The main difference is that while collecting zero party data, customers voluntarily provide insights into their preferences, leaving no room for assumptions. With first party data, however, customers are not providing you with the data firsthand but giving you permission to collect information about them as they browse through your website.
First party data is more general information that can be mainly collected from website activity, emails and support history. While this is already valuable to your business, zero party data takes things one step further. It specifically means personal customer preferences, such as product preferences, budget, personal style and taste, etc.
Below is an example of how Omio captures valuable zero party insights from their chat conversations on Instagram. Read the full success story here!
Source: Instagram profile message button
The Main Benefits of Zero Party Data for Digital Marketers
Customers are tired of companies creeping on them. If you think about it, it makes perfect sense. Are you familiar with the frustrating feeling of an ex stalking your social media accounts? Customers feel the same way about brands.
The good news is that customers are more than happy to tell you what they want. You just have to ask them.
Zero party data is a gold mine of customer insights. It can be any kind of information, such as demographics, location data, purchase history, or preferences. All those useful insights you can later use to better target your audience with relevant offers.
The main benefits include that it’s:
- Accurate: since it is shared directly by your customers, your brand can be certain that the data is accurate, and not just an assumption. It is in fact the most accurate source of information since traditional behavioral and demographic analytics only scratch the surface.
- Relevant: it enables you to learn what your customers want. This allows you to better understand and grow your audience on channels, such as Facebook Messenger, while providing them with offers based on their preferences.
- Free: Unlike second- and third-party data, you don’t pay for it as customers simply share this information with you via one to one conversations.
- Compliant: Last but not least, what makes it truly valuable is the fact that it can be collected while staying compliant with privacy updates. That’s exactly why it’s essential for marketers to start collecting it. Because it’s the only way you can safely collect data and ensure you don’t violate privacy laws.
How Marketers Can Overcome Privacy Law Hurdles with Zero Party Data
The digital advertising landscape is changing rapidly with privacy laws and updates to browsers and operating systems. Data collection became more difficult but there’s still a way to do it. Here’s how zero party data can help you overview privacy law hurdles.
Personalize customer experiences in real-time without relying on third-party data
With coming straight from customers, you don’t have to rely on assumptions about customer interests or track them extensively across websites and apps. Conversations create an open and honest exchange that enables you to collect zero and first party data. They reduce your dependence on third-party insights that don’t contribute to marketing performance as much as data directly shared by customers.
The best way to collect zero party data is via one to one conversations. A conversational marketing chatbot can collect consumers’ information like their personal information, product interests, budget, who they are shopping for, and other data that’s difficult to acquire otherwise. You can personalize each customer’s experience based on their individual preferences without cookies or traditional tracking methods.
Chatbots bring the most result, when they are driven by conversational AI. This can be achieved by a reliable conversational commerce platform, which enables you to build and launch your own chatbot.
Improve product development
When you talk to customers one to one, they share their experience with you. Not only can this information be used to personalize customer experience by giving them exactly what they are seeking, but it can also be used for future product development.
Zero party data can tell a business how much prospects are willing to spend. What product categories they are interested in. Who they are buying something for.
Using this information, you can develop new products that align with popular items and categories to continue increasing conversions, revenue, and offering a more delightful shopping experience that matches customer intent.
Besides product development, it can help you enter into new markets. But expanding into new markets requires large amounts of resources. Brands need to quickly map out a market’s interest in their product and stand out from the competition. Data directly shared by prospects can give you all this information. Declared data collected from personalized one to one conversations enables businesses to offer a better experience than competitors and deliver a unique value proposition. This opens up an entirely new channel to stand out from the competition when entering a new market.
Deliver value in exchange for customer data
If you’re about to create a declared data strategy, I’m sure you’re wondering how you can convince customers to share data with you. The answer is simpler, thank you might think: deliver value, and they’ll be happy to share their data with you in exchange.
Data collection doesn’t have to be one-sided. Far from it. Zero and first party data is a direct relationship between your brand and the customer at its core. Customers share information about themselves when they engage with your brand in their moment of need. They share information because the customer journey meets their needs and expectations.
This gives you a treasure trove of data to better know your audience. You can use these insights to send them personalized product recommendations, content digests, and answers. All of which improve the customer experience while engaging them in a private messaging channel where they feel more comfortable sharing their personal details and interests.
Boosts your advertising performance and ROI
90% of marketing leaders agree personalization significantly increases profitability. Zero party data collected through conversational marketing chatbots can be leveraged to guide customers from discovery to action, and thus accelerate the buyer journey.
How to boost your advertising performance with data collection? Provide delightful shopping experiences that entice customers to come back. Offer product suggestions exactly when they need and demand them. Engage them in their moment of need. Their moment of product research. Ask them questions about their needs and preferences. Collect these data and use it to retarget customers with relevant recurring notifications. These offers should be personalized to their needs based on the data they shared with you.
Connecting personally with consumers in these critical moments and providing them with what they need is how you accelerate purchase decisions and offer experiences that improve your marketing ROI.
How Global Brands Collect and Act on Zero Party Data
Global brands already leverage the power of zero party data to directly reach their audience, build customer profiles and send personalized offers at the right time.
Omio uses zero party data to improve customer profiles and, reach them directly
Guiding customers to find travel info with automated FAQs helps Omio capture zero party data on customer preferences. They use this to personalize the buyer journey in real-time and send personalized destination guides.
Below is an example of how Omio structures the data from chat to build audience segments and re-engage customers one to one with push notifications from Instagram.
Source: Instagram profile message button
Uber Eats captures zero party data to build segment audiences, and reach them directly
Engaging and qualifying customers in chat with a guided experience helps Uber Eats capture zero party data on their preferences. They use this to personalize the buyer journey in real-time and send a private offer.
Below is an example of how Uber Eats structures the data from chat to build audience segments and re-engage customers one to one with push notifications from Messenger
Source: Click to Messenger Facebook ad
Take Away
Consumers are a lot more concerned about their online privacy. This recent shift in customer behavior has contributed to regulations such as GDPR and CPAA that protect people’s personal information online. These privacy law changes dictate how businesses collect data and ask for consent. Technology companies, like Apple, are responding with updates that put consumer privacy front and center.
As a result, tracking, attribution, and measuring marketing performance have become more difficult with these updates. Yet the challenge presents an opportunity. Savvy digital marketers don’t rely on these old approaches to understanding consumers anymore.
They rely on zero party data. This is information directly shared by customers when you speak with them. Unlike traditional demographics and interests, it provides accurate insights into preferences, wants, needs, and desires. Who a customer is shopping for. What their budget is. You no longer have to rely on assumptions or guesses. Acquiring this type of data is also free and 100% compliant. That is what makes it the new norm of collecting data in the privacy first world.
Conversational marketing chatbots via messaging channels are the most effective way to capture valuable data. Brands can use Spectrm to build chatbots that integrate with platforms their customers use every day. Facebook Messenger. Instagram Messaging. WhatsApp Business. These enable you to deliver personalized experiences no matter where consumers engage with your brand while still respecting their privacy.
What is zero and first party data?
Zero party data is information that is explicitly volunteered by consumers in a direct interaction with your business. It can be used to validate demographic data. But it also enables marketers to identify the needs, wants and desires of a customer. It is data most marketers can only assume about their audience unless they explicitly collect it.
First party data is the information you collect about your audience or customers. This includes data from behaviors or actions performed by customers across your website, data you have in your CRM, subscription data, and data from your social media accounts.
Why is zero party data important?
zero party data is valuable for marketers because it is:
- Accurate: since zero-party data is shared directly by your customers, your brand can be certain that the data is accurate, and not just an assumption. It is in fact the most accurate source of information since traditional behavioral and demographic analytics only scratch the surface.
- Relevant: zero-party data enables you to learn what your customers want. This allows you to better understand and grow your audience on channels, such as Facebook Messenger, while providing them with offers based on their preferences.
- Free: Unlike second- and third-party data, you don’t pay for zero-party data as customers simply share this information with you via one to one conversations.
- Compliant: Last but not least, what makes zero party data truly valuable is the fact that it can be collected while staying compliant with privacy updates. That’s exactly why it’s essential for marketers to start collecting zero party data. Because it’s the only way you can safely collect data and ensure you don’t violate privacy laws.
How to collect zero party data?
Zero party data is information directly shared by customers. Conversational marketing chatbots are one of the best channels to collect zero party data. The data shared by customers in chat conversations help marketers identify the needs, wants, and desires of customers. This can be information about their budget, location, and product preferences. Brands can use this to enhance the customer experience, provide tailored shopping suggestions, and deliver personalized content.
What is the difference between zero party vs first party data?
Both zero and first party data have great value to businesses. The difference is that while collecting zero party data, you are asking for information directly from customers, leaving no room for any assumptions. With first party data, however, customers are giving you permission to collect information about them as they browse through your website.
