Why the Zero-Party Data Strategy is a Consumer Relationship Goldmine

With more power shifting to consumers, and the ever-growing concern about privacy, brands need to build consumer trust to the point where they will share information directly and intentionally. The new focus is on Zero-Party Data where brands can build a trusted community channel, create emotional connections, as well as a culture of transparency, and obtain insights through digital experiences, explains Susan Frech, CEO, Social Media Link.

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Forrester’s 2019 B2C marketing predictions report proclaimed that the “Zero-Party Data Economy Is Here.” This is a key point considering Forrester also found that 64 percent of marketers admit bad data stops them from providing a personalized experience to consumers.

Most marketers are familiar with the commonly-used buckets of “third-party data” and “first-party data.” So, what exactly is zero-party data? Put simply, it’s information a consumer shares directly and intentionally with a brand. It typically includes personal preferences, emotional leanings and lifestyle behaviors. Zero-party data benefits marketers in two critical ways: intelligence and action. It paints a holistic picture of consumers beyond the standardized age/gender/household income/purchase history that most marketers are accustomed to. And from a data ownership perspective, zero-party data is controlled wholly by the marketer. There is no stop gap of paying vendors for access or worrying about unreliable and unsecured sources. From an action standpoint, zero-party data empowers brands to offer interactive, digital experiences with audiences that create emotional bonds.

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Zero party data should be considered precious. While third-party data is invisible to most consumers and first-party data is mostly about authentication, zero-party data is a direct signal that a consumer trusts you with information about themselves. But, with more power shifting to consumers and the ever-growing concerns for privacy, what will motivate consumers to share this info? How can brands successfully navigate this new world of consumer control and use it to build brand loyalty and value? Here are four ways zero-party data can be utilized for sustained brand growth:

1. Build a trusted community channel

Consumers don’t automatically give up their data to brands. There must be a clear and concise value exchange between the data given and the experience received. Something like a zero-party email campaign doesn’t work, nor does traditional website data collection. And don’t even think about a zero-party advertising campaign. Brands must build a living and breathing home for zero-party data to be collected and acted upon. Seventy-nine percent of consumers agreed that they would be willing to share their data if there was a clear benefit for them. Marketers must invigorate loyal customer communities and encourage social interaction. An online brand community, integrated into the marketing strategy, is a powerful way to connect data to the bigger picture and encourage consumers to be a part of something they believe in.

2. Create emotional connections

Maintaining market share and customer loyalty today depends greatly on a marketer’s ability to forge a strong connection with the brand. Zero-party data empowers marketers to tap into higher-order messaging like values alignment, lifestyle and behavioral preferences. Today’s consumers have embraced being online sleuths and quickly weed out brands that don’t align with their values. This is especially true for millennial consumers: nearly seven in 10 US millennials actively consider company values when making a purchase. Instead of guessing values based on generalized demographic assumptions, zero-party data is the access point for actually understanding what those values are. 

3. Create a culture of transparency

Privacy is of great concern to consumers and any information they give must be met with an open dialogue of how data is used. Collecting zero-party data offers brands the ability to communicate its commitment to transparency. When the information is used effectively, consumers benefit. Eighty-one percent of US consumers feel they have lost control over the way their personal data are collected and used. Collecting zero-party data is an opportunity to ease those fears and be upfront with what type of information you’re going to collect, why and how it will be used.

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4. Glean insights through digital experiences

Keep consumers engaged by providing positive feedback loops that they can feel a part of through personalized communication and experiences or through transparency into how their data helped the brand make a wise decision. Provide your brand with a channel to create a positive feedback loop. If consumers gave you an idea for an upcoming advertising campaign based on their provided information, let them know they helped. If consumers persuaded you from embarking on a product upgrade that clashed with interests, thank them for expressing their opinion.

When using sparse data sets to discover more about current customers, it can make it challenging to reach consumers that may share similar attributes. It is vital for marketers to create a holistic view of their customers and it’s why a zero-party data strategy will be key in future marketing plans. With zero-party data, there is no guessing. Any plan built from zero party data is direct-from-the-source information, and using it productively will deliver a lasting, long-term relationship between a brand and its customers.