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Site Search Why is Everyone Talking about Zero-party Data?
What is it all about? How can it add value to your existing first-party data?
By Venkata Bhonagiri, Senior Partner, Group Director, Strategy & Analytics at Mindshare.
Zero-party data refers to information that a company collects from customers through voluntary and explicit means, such as surveys, sign-up forms, or preferences centers. This type of data is particularly valuable for brands as it is provided by the customers themselves, making it more accurate and reliable than third-party data. It also adds significant value to existing first-party data, which is collected through the company’s direct interactions with customers, such as website analytics or purchase history. By overlaying zero-party data on top of first-party data, companies can gain a more complete understanding of customer preferences and behavior and use this information to improve their marketing efforts and drive revenue growth.
One key way zero-party data can add value to existing first-party data is by providing insight into customer behavior and preferences outside of the purchasing process. For example, a clothing retailer can use a survey to ask customers about their preferred clothing styles, sizes, and colors. This information can then be used to complement the retailer’s first-party data on customer purchases and website browsing behavior. By combining this data, the retailer can personalize the customer experience, such as providing personalized product recommendations and special offers.
Another way that zero-party data can add value to existing first-party data is by providing information on customer demographics and psychographics. For example, a consumer-packaged goods (CPG) company can use surveys to gather information on customers’ age, income, and education level, as well as their attitudes and values. This information can then be used to segment customers and target marketing efforts more effectively.
Companies across different industries are taking different approaches to enrich their zero-party data. One approach is the use of a sign-up form or registration process. By collecting information such as name, email, and contact information, companies can gather zero-party data on their customers. This data can then be used to create personalized experiences, such as targeted email campaigns or customized product recommendations. Another approach is the use of interactive quizzes and games. These can be used to gather information on customer preferences, such as favorite colors or preferred product features. These quizzes and games can also be used as a fun way to engage with customers and build brand loyalty. Companies can also use customer feedback and reviews. Companies can gather customer feedback and reviews through various channels such as email, social media, surveys, and calls. This zero-party data can be used to improve products, services and tailor their marketing campaigns to specific segments.
However, there are challenges and limitations to consider when augmenting this data on your first-party data. One of the main challenges is ensuring that the data collected is accurate and up-to-date. This can be difficult to achieve when relying on customers to voluntarily provide information. Additionally, brands must ensure that they follow data privacy regulations, such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA), when collecting and using zero-party data.
Despite these challenges, the benefits of overlaying zero-party data on first-party data can be significant. Brands can improve customer loyalty and retention by using zero-party data to create more personalized experiences for customers. By gaining a more complete understanding of customer preferences and behavior, brands can improve their marketing efforts, increase customer engagement, and ultimately drive revenue growth.