What is Zero Party Data and Why is it Important to Marketers?

In marketing, we exist in the age of the customer. Yet the boundaries of that definition have discernibly shifted since Forrester coined the term in 2011. Today’s customer demands nuance and precision when it comes to digital marketing, and it all boils down to how expertly brands can provide them an individualised experience.

‘76% of consumers expect companies to understand their needs and expectations.’

But how do you provide a personalised service without impeaching on consumers’ privacy? Amped-up privacy protections make this no light task. Respecting consumer privacy is paramount to earning consumer loyalty, and people are cognisant of how their information is being collected and analysed by firms with or without their permission. Online distrust is rife.

This means marketers must master a delicate balancing act in order to fulfil expectations of a tailored experience without overstepping the mark and intruding on personal information without a warrant. Loyalty is key to winning in the age of the customer.

GDPR and the so-called cookiepocalypse toll the bell for behavioural targeting by standard data collection means. However, this does not call an end to personal data’s essential role in strategic marketing. Zero party data is the emerging key to getting personalisation right.

There are typically three distinctions of customer data:

  • First party data is collected directly by you through interactions with consumers. Examples include social media profile information, website usage, newsletter sign-ups, etc.
  • Second party data is collected by other companies and sold or exchanged with you — it is essentially another brand’s first party data.
  • Third party data is collected by large data providers or management platforms — giving you a broader insight into demographic behaviours and audience tendencies.

Each classification has its pros and cons. In general, third party data is beneficial for seeing the bigger picture, but fails to provide a specified view of the individual. Second party data falls short in offering the specifics that retailers need to truly personalise their marketing tactics. First party data has long been considered the most valuable source of information, however recent privacy restrictions have diminished this data’s value.

Examples include polls, surveys, and preference centre pages. Any opportunity for the customer to communicate directly with the business is a position by which to extract zero party data. It spans from details as rudimentary as telling the retailer what their favourite colour is, to as complex as how, when and why they want to be targeted. If first party data is small talk, zero party data is when the conversation gets meaty.

This information’s values lie in the value that the customer personally places in it. Where the value of first party data has previously relied on the process of inferring, this side steps such potentially flawed extrapolation. It takes away the guesswork and opens a more honest and beneficial value exchange. What a consumer’s intentions are in the here and now is much more profitable than knowing their past behaviour.

Although the term sounds superfluous, people-based marketing is the direction all brands who value authenticity should be moving in. Described as personalizstion on steroids, it means taking a far more individualised approach instead of one based on inference.

“84% of customers say being treated like a person, not a number, is very important to winning their business.”

An individualistic approach demands that you understand the varied interests of being an individual. No longer confining your customers to a generic age group and interest range means that you can recognise more nuanced tastes. It allows brands to escape homogenous targeting and instead adapt to how customers will change their tastes and interests.

When 78% of people online will unsubscribe from push notifications if they receive even one that is not to their liking, it is unprofitable to play fast and loose with consumer data. Using data that only allows you to build knowledge by connecting the dots is a less than precise method and imprecision, confounded with a customer’s scepticism about how their data is being used without their permission, leads to a vagueness that is immediately off-putting to the digitally sophisticated user. Expectations are high and are rewarded highly when they are met. Zero party data’s intrinsic directness avoids knowledge by inference.

Effort is required. Once your marketing mindset is geared towards personalisation then you have to seek ways to unlock the potential of your data. Data consolidation platforms can harness the information for you. Real-time customer details can be visualised on a unified platform so you can campaign with speed and accuracy.

When customers are skeptical about their data, it follows that any personal information they do impart reveals loyalty and trust. This loyalty must be respected by action. Communication is only meaningful if both sides are listening: a conversation fails if it is not two-way. By directly asking for opinions and advice, you are entering into a value exchange that you have promised to fulfil. Authenticity is a word that has been ringing in marketers ears for years, and what better way to prove a brand’s authenticity than to show that you can listen.

For fashion retailers in particular, this must be a continued and revisited conversation due to the nature of trends. Enthusiastically jumping on any opportunity for a brand to posit direct questions to their audience helps drive real-time personalisation and give power and value to the customer.

Reaching out for zero party data is most effective when it is engaging and entertaining. Quizzes or stories help to ignite personality from the client’s side as well as the customers.

‘49% of buyers have made impulse purchases after receiving a more personalized experience.’

The good news is that technology has made this easier than ever before. Interactive technologies give customers a digital experience that helps them specify their intentions with every visit and artificial intelligence is helping brands respond faster and with precision. Social media’s evolution and dynamic email content is bringing effective communication to the forefront. Outreach is possible to customers both new and existing.

Zero party data helps marketing teams stand on the shoulders of older marketing approaches and create sophisticated, customer-centric campaigns. Don’t let your data let you down, because now is the time to start a real conversation.



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