What Is Zero-Party Data? What Is Zero-Party Data?

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What Is Zero-Party Data?

Zero-party data is data that is owned by the consumer that they intentionally and proactively share with a brand that they trust. It can include, but is not limited to, data points like preference data, purchase intentions, or personal context.

The consumer maintains control over how their data is treated throughout their experiences with a brand. They have the power to edit their data or revoke access to their data at will.

Like consent data, zero-party data is gathered through ongoing engagement that balances personalization and privacy. It is collected by asking consumers directly what they want from a brand and using the information collected appropriately.

Effective Ways to Turn Data Privacy Challenges into Opportunities

Why Is Zero-Party Data Important?

Zero-party data is precious and should be treated with respect. In addition, it should be handled differently than that of other types of data (ie. first-, second-, or third-party data). It’s part of a new wave of personalization. When brands are granted access to a consumer’s data, those consumers expect their data to be used in a way that makes them feel special, individually, and not necessarily for the benefit of the greater customer base. The consumer has other expectations of the brand as well. Zero-party data allows brands to build direct relationships with consumers, and in turn, better personalize their marketing efforts, services, offers and product recommendations.

Collection and application of zero-party data can fine tune existing data points and provide more accurate targeting and personalization. This relationship must be nurtured, or consumers may decide to go their separate ways.

"Today it’s easy for organizations to do the wrong thing with customer data. In the future, there will be no insight without customer data. There will be no customer data without consent. And there will be no consent without value shared back to the customer." — Scott Miller, CEO Vision Critical

What Your Company Needs To Know About Zero-Party Data

Gathering feedback to understand customers allows for a continuous improvement loop and helps empower brands to create a desired customer experience.

According to a recent survey, 64 percent of consumers are fine with retailers saving purchase history and personal preferences if more personalization is offered.

Forrester agrees, noting in a recent report that it is possible for personalization and privacy to coexist.

“Say goodbye to third-party data and hello to zero-party data — data customers own and willingly provide to brands.” — Forrester

According to Forrester, 15 percent of global brands will collect zero-party data by 2020.

“The onus is on brands to make this data participation easy.” – Jessica Liu, Senior Analyst, Forrester

Customers will only share zero-party data with companies they trust, making this type of data a highly valued and very precious commodity for brands. Brands utilizing zero-party data to improve customer experiences, product innovation, marketing effectiveness, or employee engagement must have ongoing consent from their customers.

The trust necessary for zero-party data to be collected is established with openness and transparency at all phases throughout the customer journey. Trust must be of the highest significance in your company and as such, it facilitates the exchange of value between customers and companies. Companies must protect the trust they have earned by iteratively collecting and thoughtfully applying customer insights.

To protect that trust, companies need to make strategic investments to address data concerns such as bias, availability, security, and privacy, but also build a reputation for transparency, reliability, and fairness. It must be operationalized across the business within its systems, technology, and processes. The ability to continually and repeatedly meet and exceed customer expectations around data collection, use, and sharing of their consent data is key to business success.

Customer Insight in the Age of Consent

Zero-Party Data vs. First-Party Data

To understand zero-party data, it is helpful to have a primer about other data types. 

Third-party data, second-party data, and first-party data can be inferred data, observed data, and/or self-reported data, while zero-party data is limited to self-reported data. It's literally the data consumers give brands directly and voluntarily, such as survey feedback. 

Third-party data is based on inferences about customers' interests and intentions. Think demographic and psychographic customer segmentation. Third-party data examples include inferred household income, purchase preferences, and social media likes.

Second-party data is co-owned and shared between businesses. The data is often anonymized or shared in aggregate. It is governed by a shared set of policies. Second-party data examples include product preferences, web cookie data, and self-identified household income. 

First-party data is "owned" by your company. It is generated by interactions with your own audience and customers. It is governed by your own privacy policies. First-party data examples include cross-device identity matching, loyalty program activity, purchase history, date of birth, and mailing address.

Zero-party data is shared explicitly and intentionally by the customer. It includes preference data, intention data, and context data. The customer controls how data can be used. Zero-party data examples include preference data and customer survey feedback.

Consent Data: The Key to Unlocking Valuable Customer Insights

Is Zero-Party Data the Same as Consent Data?

Consent data is personal information obtained directly from a customer where both parties are fully aware of the use and benefits of that data.

What Consent Data Is Not: 

  • Data obtained using cookies
  • Data obtained using consent pop-up windows

Zero-party data, sometimes referred to as consent data, can only be considered “consent data” through ongoing engagement and an iterative approval process between a consumer and a brand. It can include preference center data, purchase intentions, personal context, and how they want to be seen.

How to Obtain Consent Data

In order to earn the right to consent data, brands must engage customers through ongoing conversations. Data concerns such as availability, security, and privacy must be addressed and brands need to focus on building a reputation for transparency, reliability, and fairness. 

How to Maintain Consent

Once a company has obtained consent from customers, they must work to ensure that consent is maintained. Earn it by giving value first, and then creating more value. Maintain it through a perpetual cycle of giving and receiving.

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