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Zero-Party Data Is The New Oil - What is zero-party data? 

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Zero-Party Data Is The New Oil.What is zero-party data and why is it a necessity for brands today – Fuel Made

 

Because your customers have chosen to give you their information, you can be confident of its quality and accuracy. Having high-quality information means you can create accurate customer profiles.

With the demand for tailored customer journeys continuing to rise, the brands that do provide high-quality personalisation are the ones that will reap the rewards. In response to the growing importance of data security and customer pressure for digital privacy, governments and regulators have either tightened or introduced data protection laws.

These protection laws mean that businesses are now put under a microscope when it comes to the strength of their data security. And brands that rely on third-party data may not be as compliant as they wish to be If you have more accurate data to hand, you will be able to nurture your customers at all touchpoints throughout the user journey according to specific customer profiles.

With zero-party data, you can improve your contextual targeting and create effective campaigns dependent on your clients' needs and pain points. This personalised service can help retain more customers in the long run. If you focus your attention on using zero-party data to inform your marketing campaigns, then you eliminate the possibility of using the same data your competitors also rely on. The data you gain from your customers is yours and yours alone. Use it wisely, and stand out in the crowd.

We are in the midst of a paradigm shift in the digital marketing world, and so the need to change the way we collect and use our data is now non-negotiable. By shifting your attention to the power of zero-party data, you too will be able to gather the vital information you need to create personalised user journeys and marketing strategies that customers now crave.

What Is Zero-Party Data? So, why should you shift your focus to zero-party data? The Benefits of Zero-Party Data As you would expect, zero-party data has quite a few business benefits. Cost Unlike other forms of data, zero-party data can be extremely cost-effective. Compliance with Regulations In response to the growing importance of data security and customer pressure for digital privacy, governments and regulators have either tightened or introduced data protection laws.

Improved Customer Loyalty If you have more accurate data to hand, you will be able to nurture your customers at all touchpoints throughout the user journey according to specific customer profiles. It can include preference center data, purchase intentions, personal contexts, and how an individual wants to be recognized by the brand.

Forrester Research was the first to introduce this term and collecting zero-party data has since become increasingly important to companies across the globe. But why? Because customers are becoming more and more concerned about their personal data.

How their data is being collected and used is much more important to many online shoppers after the amount of data breaches over the past few years. With enforcement becoming more strict on governing regulations and laws like the General Data Protection Regulation GDPR , the time to begin collecting this important type of personal data that respects the customer and keeps your company protected from legal issues is now.

Understanding the importance of zero-party data is impossible without first understanding what makes zero-party data unique. To do that, you must comprehend all of the different types of data that can be collected on your customers. In addition to zero-party data, there is first-, second-, and third-party data that companies work with.

Definition: Data that a customer intentionally and proactively shares with a brand. It can include preference center data, purchase intentions, personal contexts, and how the individual wants to be recognized by the brand. Additionally, it is freely given to your company so there are no concerns about how the data was acquired.

Disadvantages: The expectation of a value exchange. Some customers expect something in return for giving up their information. There also can be a disconnect between what customers think and what they truly want.

Definition: Information that a company directly collects via its own channels and sources. These channels include mobile apps, websites, social media, SMS, email, and more. Advantages: This type of data is unique in that it belongs to your company because you collected it. This is a competitive advantage.

It is also reliable because you know the source that it came from and there are no outside sources involved. Disadvantages: There never seems to be enough first-party data. It takes a lot of time and effort to collect this information—especially for newer customers—and you need an ample amount of it for it to be valuable.

Advantages: The main advantage is obvious—additional information on customers to help drive sales and fill in the gaps left by your other types of data. It is also ready to use upon purchase.

Disadvantages: Trust is a major disadvantage here. Since the data was not gathered by your company, you need to ensure that you trust the supplier in order to make good use of this information. Definition: Aggregated data collected from multiple different sources, packaged and sold by a company that did not collect the data itself. This is often sold on a data exchange platform.

Advantages: Since this data comes from multiple sources, the size and scope of it is generally massive. It is much larger in scale than the other forms of data. Disadvantages: Since this data is being sold to multiple companies, your company would not have exclusive rights to this data if you made this purchase.

Like second-party data, there are also many compliance issues that could arise from third-party data. While first-, second-, and third-party data can be collected in some manner, all of those types of data are not freely given.

That matters when data privacy concerns are at an all-time high. We briefly discussed the concept of the customer value exchange above but will explore it more as we examine a zero-party data strategy. The heart of the concept is this—customers are willing to share data with brands in exchange for an experience that is customized to their wants and needs.

Customers want personalized content, but they want to be in control of what data is shared to obtain that personalized experience with a company. Is there any worse feeling as a consumer knowing that you did not provide a company a piece of obviously personal information and learning that the company has that personal data through marketing efforts? A good zero-party data strategy eliminates that creepiness—because the data is collected freely and directly from the customer—and eliminates the guesswork in customizing consumer experiences.

It also helps companies measure and build trust with their customers. Capturing zero-party data helps to solve for the personalization-and-privacy paradox , a true catch for marketers. The modern customer expects true personalization but that cannot be achieved because of increased government legislation and browser privacy features.

The solution to this problem is zero-party data—so long as there is transparency around the value that customers get in exchange for their data. Consumers can choose to share their data if they desire a personalized experience. That generally leads to things being more convenient and faster in the shopping experience with your brand.