06 June 2023
Zero-party Data: Definition, Examples & Strategy
Customer data have long become a valuable source for shopping experience personalization and developing relevant marketing campaigns. Zero-party data suits this goal best since this is just the type of data customers proactively and voluntarily share with businesses.
In this article, we will explore the concept of zero-party data, and its benefits, plus discover actionable zero-party data collection strategies so that you can fuel your marketing campaigns with customer-first insights and stay compliant with data protection regulations.
What is Zero-party Data?
Zero-party data is one of the data types that companies may collect about their customers. But unlike other types, first-party data is the one that customers share voluntarily, intentionally, and proactively. For example, the product's reviews, surveys and polls results, social media comments and brand interaction preferences that the customers set on their own can be covered by the zero-party data definition.
Zero-party Data vs. First-party Data: What's the Difference
The main difference between zero-party data vs first-party data is the level of consent involved. While zero-party data is provided by the customers to the brand directly, first-party data is the information that companies gather after a user has performed a certain action. For example, first-party data consolidates information about purchase history, website behavior, demographic and contacts, social media engagement, and customer service interactions.
At the same time, both zero- and first-party data collection is regulated by GDPR and CCPA which oblige companies to get data collection consent from the customers, store this information securely, and use it only for those goals that were communicated to the users at the moment of personal data collecting.
Benefits of Zero-party Data Collection
In addition to zero-party data quality and reliability, there are other significant advantages of gathering it.
Increased trust. Zero-party data helps build trust between a business and its customers. In this case, the clients share their preferences, impressions, and feedback voluntarily, which means that they trust the company and would like to openly communicate with it.
Improved personalization. Zero-party data is a treasure for marketers. With customer-provided insights in mind, they can develop better personalized and targeted marketing campaigns, delivering highly-relevant content and product or service offerings to their customers. For instance, the company can advertise those products the customers added to their wishlists. Zero-party data also helps with defining the channels that the target audience is willing to use for communicating with a brand, making the omnichannel marketing strategy more effective.
Accurate customer behavior forecasting. Zero-party data self-reported by the clients can also be used to identify their behavior patterns, get insight into their decision-making, and predict future shopping trends. For example, when the customer consistently purchases the same type of product and according to the satisfaction survey, they are happy with it, the business can predict a repeated purchase with a higher degree of probability.
The Role of Zero-party Data in eCommerce
When it comes to eCommerce, the main advantage of gathering zero-party data is creating a competitive edge. Zero-party data allows for engaging the customers in meaningful conversations, encouraging them to share their preferences, and in this way, understanding their true needs better. Having these insights in mind, eCommerce businesses can create products or services better catered to their audience’s expectations and promote them with deeply personalized marketing campaigns.
Zero-party data also becomes a powerful tool when it comes to lead generation. For example, a brand may offer a quiz or game to engage the website visitor in the first interaction with the company, and collect zero-party data in a consent-first and unobtrusive way. For example, here is how Modoza, one of our customers and one of the biggest retail stores in Ukraine, does it. They embedded a "Wheel of Fortune'' game for visitors to get a random gift after entering their email and increased their subscription conversion rate by 5 times.
How to Collect Zero-party Data the Right Way: Examples & Best Practices
Below are some of the zero-party data collection strategies famous brands follow. Let's take a look at them and grab some insights for inspiration and your future marketing campaigns.
Quizzes and polls — Warby Parker
Quizzes and polls are effective ways to collect zero-party data from customers. Providing interactive and engaging experiences, quizzes and polls can encourage users to actively participate and willingly provide information about their preferences, interests, and behaviors. For example, here is how Warby Parker, an optic glasses retailer, uses a quiz to help new customers choose the right frame online. In addition to turning leads into customers, such quiz-generated data can be used for more accurate customer segmentation, which can help businesses personalize their marketing campaigns and improve the customer experience.
Product reviews — Amazon
Product reviews shared by customers are another valuable source of zero-party data for businesses. In this way, the customers share first-hand impressions and experiences that eCommerce companies can use for identifying areas for improvement. For example, Amazon is well-known for its solid product review gathering and analysis strategy. In addition to providing a transparent platform for feedback sharing and gathering zero-party data, Amazon also builds customer loyalty and social proof in this way.
Personalized loyalty programs — Sephora
Developing personalized loyalty programs is the next actionable tactic to learn more about customers' preferences. By offering personalized incentives and behavior-driven rewards (like earning points for every purchase), eCommerce companies can build more trust, and in this way, encourage the customers to share their impressions, opinions and needs more openly. For example, Sephora has a Beauty Insider loyalty program that segments the customers into three groups (Insider, VIP, and Rouge), depending on the amount they spend in the store annually. After signing up for the program, the customers can share their beauty goals and needs, customize content and budget preferences and receive more personalized product recommendations.
Personalized onboarding — Babbel
Both digital products and retail brands may also consider personalized onboarding as a way to gather zero-party data from new customers. For example, Babbel, a language learning application, leverages user onboarding to collect zero-part data, and learn about the student's language goals, interests, and preferred learning style. After that, a student receives a personalized language learning program.
Content customization — ASOS
Gathering zero-party data from users also gives brands a way to personalize content delivery too, in addition to tailoring products and services to the customers’ preferences. For instance, when a user creates an ASOS account, they can also customize their content choice, put a checkmark on the newsletter topics they are interested in, and stay updated.
Building Your Own Zero-party Data Strategy with Yespo
Now, let’s find out how the Yespo customer data platform can help with collecting zero party-data and using it for an omnichannel marketing strategy.
Gather zero-party contact data of new subscribers
With Yespo, you can start converting your leads into customers and discovering more about them right during the first interaction with your brand. Our easy-to-integrate widgets that you can custom-set in response to your website visitors’ behavior will encourage them to make a target action faster and with less effort. For example, you can collect zero-party contact data and suggest your visitors subscribe to newsletters with the help of interactive widgets.
In this way, Netpeak, one of our customers and leading marketing agencies in Ukraine, grew their subscriber base by three times and doubled their revenue at once. Moreover, after the visitor fills in the form, a contact data collection workflow will be launched automatically. Next, you will be able to use it for brand communication via SMS, instant messengers, email, and other channels.
At the same time, using subscription forms isn’t the only way to collect customers' contact data. Web and mobile push messages can also work as tools for zero-party data collection, and with Yespo, you can integrate them into your website and mobile app as well. These messages can be used to proactively engage with customers and encourage them to subscribe to the newsletter or create an account.
Discover customer’s opinions with surveys and quizzes
Survey and feedback emails can also be valuable sources for collecting first-party customer data. For example, you can run such a survey after the customer receives their purchase and find out their opinion about a specific product. Customer satisfaction surveys and Net Promoter Score polls are also valuable sources of zero-party data.
As an option, you can offer the customer to take a survey via email. With the help of Yespo, you can set up automatic email campaigns, tailoring them to specific behaviors of your customers, and then analyze customer data in a single dashboard.
Still, using email isn’t the only communication channel to gather zero-party customer data with the help of surveys and quizzes. You can also leverage push notifications, SMS, instant messaging, and widgets for this goal. With the Yespo customer data platform, you can start collecting zero-party data according to the omnichannel approach, leveraging all the communication tools available.
By consolidating widgets, emails, web and mobile push notifications, SMS, and instant messengers into a single communication strategy, Yespo helps businesses stay in the closest possible touch with their customers and kindly encourages them to share their opinions, impressions, and references.
Encourage customers to share reviews and provide feedback
Gathering customers' reviews is incredibly important and insightful for any business. They provide valuable feedback that can help improve the quality of products or services offered. However, not all customers are willing to share them. In this case, you can ask them in different ways and use diverse communication channels. Below are some of the ideas on how you can do it with the help of Yespo:
Send an email with a request for a product review in exchange for a discount for the next purchase.
Ask the customer to rate their experience in a one-tap way by sending a notification in a mobile app.
Embed a website widget that will appear when the customer visits a website the next time after getting their order shipped.
Create an omnichannel feedback collection strategy and try asking the customers to leave a review using several communication channels one by one.
Start collecting high-quality zero-party customer data!
As data privacy concerns continue to grow, collecting zero-party data becomes a solution for businesses to collect data in a transparent and ethical way. What's more, with the help of newsletter content customization, personalized loyalty programs, quizzes, polls, and product reviews, companies can gain a better understanding of their customers' preferences and use this information for business strategy development. You are also welcome to start collecting zero-party data, stay ahead of the curve and create more meaningful relationships with your customers with the help of Yespo CDP.