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What is Zero Party Data and Why Do Marketers Need it?

What is Zero Party Data and Why Do Marketers Need it?

In a world where consumers are increasingly concerned with privacy, marketing professionals need to know about zero-party data. 

Traditional data collecting methods are often viewed as intrusive and obsolete. Using zero-party data is a modern solution that lets companies align their goals with their customers’, creating a more personalized brand experience. 

Let’s break down exactly what zero-party data is and why it’s important.

What is zero-party data?

Companies can collect multiple types of customer data, including first-party, third-party, and zero-party data. 

If you’re interested in marketing, there’s a good chance that you’re familiar with first-party and third-party data. 

  • First-party data encompasses everything someone does on your digital properties. If they enter an email address, click through your online catalog, place a new product order, etc. This data provides valuable insights into who visits your website but doesn’t tell you anything about potential customers who haven’t engaged with your brand yet. 
  • Third-party data is collected by outside sources that don’t interact with the consumer. This data typically includes geographic and demographic information. Third-party data can be problematic because it’s often collected from unreliable sources. You might receive information that’s incorrect or out-of-date.

Zero-party data is information that customers willingly provide. Brands can use this data to create a highly personalized experience. If dog owners want to hear about the new dog park in town, or if sports fans are interested in deals on team merchandise, this is the type of personalized experience they can have with zero-party data. According to Forrester’s Fatemeh Khatibloo, zero-party data is shared proactively and intentionally.

“Zero-party data is that which a customer intentionally and proactively shares with a brand. It can include purchase intentions [and] personal context…”

The main difference between zero-party and first-party data is transparency. When you collect zero-party data, consumers know exactly what’s going on. They actively provide information in exchange for something they value, like a discount or insider information. 

Consumers can willingly provide first-party data as well, but they don’t have to. You might be tracking metrics the user isn’t aware of, like time spent on a webpage.

Why is zero-party data important?

Consumer privacy concerns are shifting the internet landscape and will do so for years to come. 

Traditionally, websites relied on cookies to track data, little snippets of information or code that are stored in a user’s browser when they visit a website. 

Cookies are less popular now that consumers want to know exactly how their data is being used. Europe’s GDPR (General Data Protection Regulation) and California’s CCPA (California Consumer Privacy Act) are measures designed to increase transparency and curtail the use of cookies. In addition, many popular browsers have agreed to phase out third-party cookies entirely. 

Brands need to develop new, ethical ways to connect with their customers. That’s where zero-party data is useful. Customers have no qualms with brands using zero-party data because they provided the information willingly.

Benefits of zero-party data

Zero-party data has numerous benefits. Here’s what they include:

  • Zero-party data is compliant with GDPR and CCP regulations.
  • Brands have explicit rights to the data.
  • You learn real, verifiable facts instead of inferences. You know that the customer has a German Shepard because they volunteered the information and not because they purchased an extra-large dog collar.
  • As more information is provided, brands can customize the user’s profile. 
  • Closed-loop attribution gives you real-time evidence that your data-driven campaign is working. You can track the return on every $1 you spend on advertising. If you ask customers what their favorite fall color is before marketing orange hats to everyone who said orange, you’ll be able to link the increase in sales to your advertising efforts.  
“Zero-party data is extremely valuable and will improve the effectiveness of your firm’s personalization efforts,” says Forrester’s Khatibloo.

Collecting zero-party data

You have two options if you want to collect zero-party data: you can do it yourself or use a dedicated service like Klover. 

When you’re collecting the data yourself, it might look like a prompt on your website. This can include prompts to fill out a style quiz to find your best look. Or, enter your birthday to learn your horoscope. This information is invaluable, but it’s also limited. 

For a highly targeted approach, team up with a company like Klover. Our users are able to receive financial services and tools to help enhance their online experience when they volunteer their data. The information we collect is detailed, verifiable, ethically sourced, and is secured with 256-encryption. We can help you target customers interested in products with niche USPs because we have a wealth of high-quality data available. 

How to use zero-party data (Examples)

Let’s say people take a survey and answer the question, “how much money are you willing to spend on a computer?” 

If you sell computers, access to this data would be priceless. You could market a discounted, used laptop to everyone who indicated they wouldn’t spend very much. Your brand-new, top-of-the-line model with the latest specs can be marketed to consumers who said they’re willing to pay top dollar. 

Or, you might have data about your customers’ birthdays. You can send a small discount as a gift.

Personalization is much easier when your efforts are backed by zero-party data.

You can take advantage of Klover’s amassed zero-party data with our Curated PMP. Your customers will reap the benefits as well.
Email info@joinklover.com today and discover precisely how zero-party data can strengthen your business.

Josh Lamb
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