What is Zero-party data?
Zero-party data refers to data that a customer has willingly shared with an organisation. This shared data often contains details that a customer wants an organisation to know about them, such as product/style preferences or purchase influences.
Collecting information in this way can help to personalise and improve the customer experience – this benefit drives customers to share their data voluntarily.
Since there is some confusion between the different types of consumer data out there, let us take a quick look at their characteristics and differences.
What are the differences between First-, Second-, Third- and Zero-party data?
Consumer data can be classified into four main categories:
- First-party data
- Second-party data
- Third-party data
- Zero-party data
The key difference between these four types is their method of collection. However, it is important to identify what sets each type of data apart from the others.
Here is a quick breakdown of each type of consumer data:
|First-party data||Second-party data||Third-party data||Zero-party data|
|Data you have collected directly from your customers.||Data filtered through another – trusted – organisation, indirectly collected.||Data bought from an outside source that is not the original collector.||Data given to you directly and voluntarily by your customers.|
|Examples: website clicks, app downloads,transactions||Examples: website activity, social media profiles, survey responses||Examples: subscriptions, purchase habits, household income.||Examples: pain points, contact information, shoppinf preferences.|
Allows for a maintained one-on-one connection with customers.
New data-backed messaging boosts sales.
Diversifies and expands your dataset.
Helps to increase reach and acquire prospective customers you may have missed out on in the past.
Builds a better understanding of your customers and improves targeting.
Helps to identify the best prospects, based on advanced analytics.
Privacy-protected, because data is voluntarily shared.
Trustworthy and definitive, as it is collected directly from the data subject.
Now that we know how the four types of consumer data differ from each other, let us understand the importance of zero-party data for your organisation.
Why is Zero-party data beneficial?
Zero-party data contains far more personal information than email addresses and location histories. It clues organisations in on their customers’ pain points and needs, and contributes to its biggest benefit – more relevant and personalised recommendations and campaigns.
Tailor-made marketing messages are more likely to result in purchases, thereby improving sales and building a more trusting relationship with customers.
Zero-party data also brings to light the concept of explicit consent and its necessity for processing sensitive data.
Aside from the benefits and importance of relying on zero-party data, let us explore a few of its drawbacks.
Are there any disadvantages of using Zero-party data?
Since customers are expected to release data voluntarily, zero-party data is often limited – the longer the questionnaire or survey is without an appropriate value exchange, the less likely customers are to answer all questions.
Not only is zero-party data limited, but it may also not be honest. In some cases – such as answering a survey to access gated content – customers may simply enter inaccurate or dishonest information to speed up the process.
Now that we know the facts, let us look at some common uses for and methods of collection of zero-party data.
How do you collect and use Zero-party data that complies with GDPR?
Zero-party data can be collected in a number of ways. Interactive experiences are most effective, such as:
- Social media polls
- Registration forms
Registration forms are the simplest way to collect zero-party data in a GDPR compliant way. Asking for explicit consent ensures transparency in that data subjects are informed that their data is being collected.
Engaging data collection methods provide value in itself to customers, but tying zero-party data collection to a reward or item of value, for example: contest prizes, gated content, priority access to events, encourages customers to share their information. Zero-party data can also be collected via email and in-store interactions.
Dynamic websites and applications, personalised newsletters and other content, and holistic market research are just a few uses of zero-party data. Zero-party data can be accessed and used instantaneously, allowing for more accurate and time-based targeting.
As with any marketing or data-collection tool, zero-party data has its advantages and disadvantages. It is most useful for its role in developing relevant and personalised campaigns and reducing our reliance on third-party data.
It is voluntarily given and allows for cookie-less tracking and the combination of consent receipts and marketing preferences.
Read on to learn how the sensitive data collected in these efforts must be processed in accordance with the UK GDPR and speak to one of our consultants about achieving data protection compliance.