Everything you need to know about zero-party data

How much time does your target audience spend on your company's website? Since most websites offer generic experiences, the answer is probably, "Not much."

This is a problem because your company's website is the best place to engage potential customers. After all, you own it, so you get to make the rules—unlike on social media.

Good news: Effective website personalization will encourage visitors to give you zero-party data. And when you have access to zero-party data, you can personalize your site content even more, leading to better experiences, higher sales numbers, and greater customer satisfaction.

In this article, we explain what zero-party data is, why it's important, and how to get it. That way, you can build personalized website experiences that keep potential customers coming back.

#What is zero-party data?

Zero-party data is personal information that a customer intentionally shares with a business.

Zero-party data examples include the customer's email and phone number, purchase and support history, and loyalty program details. This information is typically collected via onboarding forms, customer surveys, interactive quizzes, preference centers, and social media comments.

#Zero-party vs. first-party data (and how other data types compare)

Zero-party data is far from the only data type available. There's also first-party, second-party, and third-party data. Here are the main distinctions between them:

• Zero-party data: Personal information that customers intentionally share with brands. Example—Personal data the customer gives a brand during the onboarding process.
• First-party data: Customer information that's collected via the brand's owned channels. Example—Personal data collected by analyzing a customer's in-app behavior.
• Second-party data: First-party customer information that comes from another brand. Example—Customer survey results given to you by a partnering business.
• Third-party data: Second-party data that comes from an outside source. Example—Customer demographic details purchased from a data collection company.

#Why is zero-party data important?

Zero-party data is important because it's more accurate than first, second, and third-party data. As such, zero-party data allows for greater website personalization.

Accuracy

Zero-party data is provided by the customer, not inferred by various software platforms. In other words, zero-party data comes directly from the source. This makes it more accurate than other data types and allows companies to improve their personalization efforts.

Personalization

According to McKinsey, 71% of consumers expect personalized interactions throughout the buying process, and 76% of consumers get frustrated when they don't get it. Zero-party data tells brands exactly what their customers want. This information can then be used to craft better website experiences that engage visitors and encourage them to become paying customers.

Compliance

Thanks to GDPR, CCPA, and other laws, data collection and management practices are highly regulated. In many jurisdictions, you need explicit consent to gather and use customer information. Zero-party data removes this barrier by acquiring data directly from customers.

#The current landscape

You don't just need zero-party data—you need it right now.

As mentioned, privacy laws restrict the information you can collect, but zero-party data eliminates this hurdle. Also worth mentioning, cookie depreciation is always looming. While Google has recently paused its third-party phaseout in Chrome, it could reverse this decision at any time. Plus, other web browsers, like Safari and Firefox, forbid third-party cookies.

Just as important, modern consumers expect personalized buying experiences. If your company's website doesn't cater to their needs, they won't engage with your brand or buy its products. As a result, your company's reputation and revenue potential will plummet.

#How personalization impacts engagement

Personalization can have a tremendous impact on customer engagement.

Even simple things, like addressing someone by their first name in marketing emails, make customers feel seen and valued. These feelings open the door to future sales.

But personalization can go much deeper. For example, you can email customers about specific sales based on their website browsing history. Or change the website content they see on your company's home page based on their physical location. New York-based customers see heavy coats in December while Florida-based customers see swimsuits, for instance.

Tools like Hygraph make this second scenario a reality via Variants, a new feature that enables you to create and manage personalized content at scale. Put simply, it means you can alter your website in real-time based on who's visiting, which can boost conversions by as much as 30%.

#Creating a zero-party data strategy

Now that you know why zero-party data is important, you can devise ways to collect it. Here is a simple, four-step strategy to help you collect and benefit from zero-party data:

1. Identify your goals: Why do you want zero-party data? Is it to improve your personalization efforts? To increase customer engagement and sales? To inform product development? Clear goals will help you implement an effective data collection strategy.
2. Clarify the value exchange: Tell customers why you need their data and the benefits of giving it to you. Doing so will build trust and increase the zero-party data you have access to. As such, this step will strengthen your customer relationships.
3. Implement a data collection plan: Determine how you'll collect zero-party data. Strategies include onboarding forms, customer surveys, interactive quizzes, preference centers, and social media comments. We'll explore each strategy in greater depth below.
4. Use zero-party data to meet objectives: Combine zero-party data with the first, second, and third-party data you already have. Then use the information to achieve your goals, i.e., create personalized marketing campaigns or build better products.

#Omnichannel and the value exchange

It's important to understand that zero-party data isn't just a web form tactic—it must flow across channels. Put simply, you need to create consistent experiences across all touchpoints, including your company's website, mobile app, email list, and brick-and-mortar storefront.

For example, if you collect zero-party data via an interactive quiz, you should use the information to personalize your emails and provide better website experiences. This will reinforce trust and make data-sharing feel natural, no matter where customers engage with your brand.

#How to collect zero-party data

There are many ways to collect zero-party data for your organization. Here are five popular strategies you can use to get the customer information you need:

Onboarding forms

While onboarding new customers, you can ask questions about their preferences and interests. Just make sure answering these questions is optional unless you absolutely need the data to deliver a quality customer experience.

Customer surveys

You can send surveys to existing customers. How did they hear about your company? Did they enjoy their recent buying experience? What do they like about your products? What can you do to provide better support in the future?

Interactive quizzes

Offer quizzes to customers to learn more about them. For example, a clothing retailer could send a "What's Your Style" quiz that helps participants discover their personal style preferences. The retailer can then promote pieces via email that suit said participant's tastes. This kind of interactive content is both fun and informative.

Preference centers

Through preference centers, customers can customize their experience with your brand. Common preference selections include personal interests, communication channels, and specific products—all of which provide valuable data.

Social comments

Finally, you can peruse your social media channels to learn more about your target audience. What do they write in comments? Add these details to your company's CRM software and personalize your future marketing campaigns.

#Examples of effective zero-party data collection

So, what does effective zero-party data collection look like IRL? There are many examples we could share. Here are three of our favorites:

Sephora

Sephora is renowned for its Beauty Insider loyalty program. Once a customer joins, Sephora captures many important zero-party data points, such as location, preferred products, and order frequency. These details allow Sephora to send personalized emails that lead to more sales and greater customer loyalty.

MeUndies

MeUndies made a name for itself selling undergarments and loungewear. Once a shopper creates an account with the brand, they're asked to share their communication preferences. This helps MeUndies know when and how to contact their customer base.

Letterfolk

Letterfolk sells creative home goods, like customizable tile mats and cuckoo clocks. The company is very active on Instagram, using the platform to collect customer insights. It then uses this information to inform its product development efforts and ensure customer satisfaction.

#Closing thoughts

Zero-party data is important because it's highly accurate. Once you have it, your company will be able to personalize its marketing efforts without worrying about compliance.

Of course, you need the right tools to succeed with personalization. Hygraph simplifies the personalization process with industry-leading content variants and taxonomy features. With our platform, you can easily display custom messages to specific user segments. The result? Greater customer satisfaction, more sales, and a better reputation in the marketplace.

Contact us to learn how our headless CMS can improve your personalization efforts.