Zero-party data is information that customers freely provide to brands in relation to account mapping, including preferences, interests, and purchase intentions. It is authentic and transparent because it is provided directly by the consumer rather than indirectly or through tracking cookies. Zero-party data allows the personalization of experiences without requiring third-party sources.
The alternative is third-party data: Information collected from external sources, often without the same level of accuracy or consent.
What’s so important about zero-party data
- 70% of marketers report better customer relationships using zero-party data.
- Companies using zero-party insights experience a 30% increase in conversion rates compared to traditional data methods.
- More than 65% of customers will interact with a brand when their preferences are used for personalization.
- Analysts further predict that the adoption of zero-party data will increase by 40% by 2025, driven by increased privacy regulations and growing consumer demand for transparency.
What are the experts saying about zero-party data
There’s no cleaner way to get contact info than directly from your customer. You can put checks in place to ensure they enter info correctly.
The best info comes straight from the horse’s mouth – aka the customer. By getting data directly from consumers, you’re skipping the guessing game and dodging mistakes, ensuring what you have is spot-on. No filters, no mess, just the good stuff for personalized marketing.
How real companies use zero-party data
Sephora collects zero-party data through its Beauty Insider program, which provides customers with customized quizzes and asks for feedback. This practice allows Sephora to develop product recommendations and personalize product promotions to keep customers satisfied and returning. Using the data, Sephora has significantly improved customer engagement and loyalty, proving that voluntary data sharing pays off.
Starbucks also captures zero-party data through its mobile rewards app, asking consumers about their favorite beverages and offers they’d like to receive. It then uses that information to promote specific offers and product recommendations, improving the customer experience. The result for Starbucks is deeper app engagement and a higher conversion rate on targeted campaigns.
How to solve a zero-party data challenge
Challenge:
A common challenge is persuading consumers to share their preferences without being intrusive. Most potential users are wary because they have concerns about their privacy (and for good reason!).
Solution:
Brands, listen up: Be crystal clear about how you’re using customer data, lock it down with solid protection, and throw in some exclusive perks like offers or loyalty points. Do this right, and you’ll have a win-win – consumers will trust you and stick around for the rewards.
How to improve your zero-data strategy
- Clearly explain how the data shall be used and protected.
- Provide attractive incentives that promote voluntary sharing.
- Incorporate interactive tools, such as quizzes and surveys, on digital platforms.
- Periodically update and analyze the information collected on relevance.
- Be transparent regarding data usage with the customers.
- Ensure appropriate security measures to protect shared data.
- Make improvements in the collection based on the feedback provided.
