Want to Get Better at Personalisation? Try Zero-Party Data

by Jennifer Yeadon Cheetah Digital

Data, data, data. Marketers have so much data we’re drowning in it. Collected from various third- and first-party methods, this data should make our lives as marketers easier. We should be able to use this data to create campaigns that convert every. single. time. But we aren’t.

So, why not? Here’s the issue: studies have shown that consumers are most responsive to marketing that’s customised to them. In order to customise campaigns to consumers, marketers need to hear from consumers themselves about what’s important to them and what they prefer. Put simply, marketers need better quality data.

It’s time we take a second look at the data we’re collecting and how we collect it — because marketers can build better, more personalised campaigns if they stop trying to collect all the data and focus on earning zero-party data.

From third-party data to first-party data

The quality of campaigns depends on the data we collect. Marketers have often relied on third-party data, that is, data collected from outside sources and compiled to form a picture of a consumer. This type of data can include information like demographics, credit scores, inferred household income, and social media page likes and can be gathered from a variety of “unrelated and unreliable sources.” When data is gathered in this manner from so many disparate sources, it can result in a contradictory, outdated, and irrelevant view of the customer.

At best, third-party data can be used to supplement other types of data, like first-party data. At worst, third-party data leads marketers to waste time and effort throwing content at an audience that’s mostly going to ignore it. And legislation like GDPR is only making third-party data usage riskier by making both companies and their third-party vendors (including ESPs and CRMs) liable for non-compliance. Not to mention all the privacy issues collecting third-party data is rife with.

First-party data is a far more reliable and useful data set but, as consumers become increasingly wary of data collection practices, it is getting harder to come by. First-party data is gathered by the marketer from their own websites, physical or in-store transactions, loyalty apps, or mobile wallets and can consist of data like form fill-ins (form fields can include PII like name, address, email, mailing address, etc.), purchase history, and loyalty program activity. With this type of data, marketers can create more targeted and personalised campaigns.

However, even with first-party data, we’re still only creating campaigns using what we’ve gathered about a customer. This data is great at showing what a customer’s past behaviour has been, but it’s more useful to know what a customer will do in the future. For that, we need zero-party data.

Personalisation with zero-party data

According to Forrester, 57 per cent of customers will voluntarily give their data to companies for a personalised marketing experience. And, as Fast Company points out, personalisation only works when the data is accurate. We know from past experience with different types of consumer data that the best way to get accurate personal data is to get it directly from the consumer.

When we get this data directly from the consumer — and it is willingly and purposefully given — it’s called zero-party data.

Zero-party data can be the key to not just understanding purchasing history, but purchasing intent. We no longer have to infer what customers want; we can simply ask and they’ll tell us. Zero-party data isn’t about tricking consumers into giving up their data, it’s about creating a relationship with them. When consumers trust your brand, they’re entirely willing to share data in exchange for tailored content that is valuable to them. Even better, zero-party data allows marketers to create ever-more personalised and tailored marketing campaigns over time — leading to deeper, more meaningful customer interactions.

To collect zero-party data for personalisation, we can use multiple methods like quizzes, surveys, and experiences. The key is to offer something of value in return, ie, a value exchange. These value exchanges have to be attractive enough to the customer to make them want to share their data. Coupon codes, prizes, sweepstakes, exclusive content, and social shoutouts can all be used to encourage consumers to participate.

And what type of data can we expect consumers to share? The sky’s the limit! For example, a vacation questionnaire could reveal preferences on future travel destinations, or an interactive quiz on spending could allow a bank to better target their customers by spending habits. Zero-party data rewards those who plan ahead on what type of data they’re looking for, how they’re going to ask for it, and what they’re going to use it for.

Working alongside first-party data, zero-party data is one of the best ways to create personalised campaigns that delight consumers, build trusted relationships, and take our marketing efforts from wasted to purposeful.