Zero-party data is information that a customer actively chooses to share with your brand. It includes personal details that a shopper might share with a sales rep, such as what they’re looking for, their age and gender, and the best ways to contact them.
As privacy becomes increasingly important to consumers, intentionally provided information is even more valuable to marketers. Here’s what you need to know about zero-party customer data, how to collect it, and how to use it for your brand.
What is Zero-party data?
Zero-party data is information that people voluntarily share with your brand. It typically includes their likes and dislikes, personal context, and specific interests or needs they express directly to you. If you collect data from a preference center through your website, it also covers how consumers want to interact and communicate with your brand.
In addition to selecting their preferences on your site, consumers can proactively offer this information by completing surveys, commenting on your social media posts, or through direct feedback. Examples of zero-party data include a music streaming platform asking users for their favorite genres or food delivery apps asking about their dietary preferences.
Since zero-party data is actively shared by the customer, it is incredibly accurate and reliable. But there is one challenge: getting people to share their information in the first place can be difficult. Your brand needs to make sure customers know you’re worth their time and that you’ll protect their data, or they won’t bother sharing it.
Types of customer data
These categories help establish why zero-party data is a game-changer in the collection and use of customer data.
First-party data
First-party data is unsolicited data that companies collect directly from their users through their websites and apps. This often includes behavioral data such as pages visited, items purchased, and time spent browsing.
Users are generally aware that this data is being collected due to cookie notices and privacy policies, and it is primarily used for personalization and service improvement.
Second-party data
Second-party data is essentially first-party data that one company collects and then sells or shares with another company.
The benefit here is that companies can expand their understanding of customer behavior by using data from a trusted partner. However, the downside is that customers are often unaware that their data is being shared and have not given explicit consent for it.
Third-party data
Third-party data is collected by companies that do not interact directly with users, but rather aggregate information from various sources. This data is then sold to other companies and includes broader categories, such as demographic data.
They are often collected without the user’s direct consent, and because they are aggregated from multiple sources, they are often not the most accurate.
Zero-party data
The new entrant: zero-party data, also known as solicited data.
Zero-party data is different from the other types of data mentioned above because, by definition, the customer or individual has knowingly provided the data to the company that will use it. The customer actively hands over the data, “beyond” passive sources of first-party data such as browsing and purchasing behavior. But why is that? What makes zero-party data so special?
The customer actively hands over zero-party data to the company because using it will benefit them in some way, such as making recommendations based on their product preferences, delivering personalized content, or fulfilling their communication preferences. It’s a kind of value exchange.
Here is the information in table format:
| Data type | Zero-party data | First-party data | Second-party data | Third-party data |
|---|---|---|---|---|
| Customer relationship | Direct relationship with the client | Indirect relationship with the client | Indirect relationship with the client | Direct relationship with the client |
| Collected with consent | Collected with consent | Collected with consent | Unknown if collected with consent (depends on data provider) | Collected with consent |
| Data type | Individual data | Individual data | Aggregate data | Individual data |
| Precision and reliability | High precision and reliability | High precision and reliability | Low precision and reliability | High precision and reliability |
| Shared | Not shared | Shared only with trusted partners | Shared with many companies | Not shared |
| Examples | Customer Email, Phone Number, Purchase History, Support History, Loyalty Program Information | Website Activity, Social Media Profiles, Customer Feedback, Customer Surveys | Income, Age, Education, Websites visited, Survey responses | Communication Preferences, Product Preferences, Custom Account Settings |
Benefits of using Zero-party Data
Labeled as ‘the new oil’ by Forbes due to its huge potential for new types of personalization, zero-party data refers to information that consumers voluntarily provide. In addition to being better for consumer privacy, voluntarily provided information promises several benefits compared to other types of data, especially third-party data.
It is more reliable
When a customer voluntarily provides personal data to a company, they are more likely to tell the truth about themselves, their preferences and behaviors. This is because when you know how your data is used, there is less temptation to falsify it to access a service.
By opting for zero-party data, you are meeting customer privacy expectations and increasing their trust in your brand.
It is explicit, not implicit
With zero-party data, you know an individual’s preferences because they’ve told you so. Other types of data, such as first-party and second-party data, infer consumer intentions, preferences, and attitudes from their behavior. But these inferences aren’t very precise.
For example, you might assume that someone is interested in football because third-party data shows they have visited several sports websites, and make predictions about their purchase intentions based on that assumption. In reality, however, that person might not be interested in football, but they lent their device to a football-loving family member or bought a gift for someone who is.
It is more precise
Simply put, customer data that comes directly from the person who owns it is less likely to be inaccurate. It hasn’t passed through multiple systems, been aggregated, or reproduced, so it’s less likely to be out of date by the time it reaches you.
Leads to better personalization
When businesses and their customers are on the same page about how personal data will be used, there is a greater likelihood that the results will be of high quality and value. It becomes significantly easier to personalize experiences (especially if you have a customer data platform to leverage insights) and create unique paths for visitors and customers.
Using zero-party data to personalize experiences and content differs from using the large volumes available with, say, third-party data. With zero-party data, there is less quantity, but it is of higher quality and more complete. The fidelity of the data to an identifiable person is much stronger and therefore more effective.
How to collect Zero-party Data
Zero-party data collection can encompass a wide range of sources. But regardless of the method used to collect data, the most important factor is that it feels natural and not forced. You want people to feel like they are gaining something by giving you their information.
Companies that don’t pay attention to the experience of capturing zero-party data risk overwhelming their users with too many requests for information and exposing themselves to the risk of not collecting it at all. So make sure you collect zero-party data in a personal context, using engaging experiences that aren’t too difficult to complete and are clearly tied to benefits for the user. Remember, it’s a transaction where personal data is exchanged for a personalized benefit. Make it a win-win, and you’ll be successful at collecting zero-party data.
Here are some of the most commonly used collection methods, along with some practical tips to help you get there:
- Surveys: Don’t just throw out a generic survey; make it relevant to the user’s current experience. If they just made a purchase, ask them about it.
- Quizzes: People love quizzes that tell them something about themselves. At the end, ask for an email to send them their personalized results, and voila, you have zero-party data.
- Forms: Go beyond the typical ‘name-email-submit’ format. Maybe add some optional fields asking about their preferences, so you can personalize their experience from the start.
- Interactive tools and funnels: Think mortgage calculators for a home loan website or a skin type assessment on a beauty site. Tools like these not only offer real value but can capture details about user preferences.
- Rating and review buttons and sliders: Use these in your product listings or post-interaction surveys to let users actively tell you what they think.
- Social media platforms: Conduct interactive polls or Q&A sessions. These not only engage your audience but can also provide you with zero-party data directly from user responses.
- Transactional data: After a purchase, capture information like ‘How did you find us?’ or ‘Would you like to be part of our loyalty program?’
- New Customer Registration Details: Mix up the classic registration form template with some optional extra fields like ‘What are your interests?’ or ‘How often do you shop X?’
In many cases, the way zero-party data is collected is a natural fit for the interactive nature of online life: it can be fun and interesting for customers to take a quiz, fill out a personal profile, or take a survey about things they like. Done the right way, collecting zero-party data can help customers feel heard, known, and valued.
