Zero-Party Data: What’s at Work Behind-The-Scenes to Make Marketing Campaigns Successful

A marketing team at a fast-growing e-commerce startup is facing a critical challenge – declining user engagement and increasing customer churn. Feeling perplexed and unsure how to tackle this issue, they know they need a game-changing strategy to turn the tide.

That's when they hear about the transformative power of zero-party data.

Intrigued, the team implemented a quick and friendly data form within their communications and into their product/panel/dashboard, allowing users to share their preferences and interests voluntarily. 

Then, the marketing team hit upon a goldmine of personalized insights about their users, enabling them to tailor their marketing campaigns to individual needs. Once the customized campaigns roll out, the results are remarkable. 

Things get turned on their head. User engagement shot to an all-time high, and churn rates started dwindling. 

If this story piques your interest, read on. We will decipher the how's and why’s of the transformation that gave a new lease of life to their marketing campaigns and brought increased conversion as well as a higher ROI.

What is Zero-Party Data?

Zero-party data refers to information willingly and intentionally shared by customers with brands. It can include preferences, purchase intentions, personal data, etc.

Consider this: You are meeting your customer in person. Naturally, you would want to use that time to ask questions and initiate conversations to understand their preferences and interests.

When you foster such interactions with customers, data collection, marketing, and interactions transform into meaningful conversations rather than one-way pitching of products and services.

You start getting to know your users better. This shift in perspective gives you specialized data that improves your business and makes customers feel valued.

A survey by Accenture depicts that 91% of consumers are more likely to shop from brands that provide relevant recommendations and offers. 

Zero-party data transforms how businesses engage online customers and encourage robust engagement, retention, and loyalty of shoppers. 

Here are a few reasons to start thinking about zero-party data today!

Reasons to Collect Zero-Party Data

Zero-party data removes the guesswork while defining audience segments. It helps to create a personalized experience while respecting users' privacy. 

Here are the top five reasons to consider collecting zero-party data:

1. Improved personalization: According to a study by SmarterHQ, 72% of consumers say they will only engage with personalized marketing messages.

Leveraging zero-party data allows businesses to gather explicit preferences directly from customers, leading to better personalization and increased engagement.

2. Higher ROI on marketing campaigns: A report by Epsilon revealed that 80% of consumers are more likely to purchase when brands offer personalized experiences. 

By using insights from zero-party data to tailor marketing campaigns, businesses can achieve higher conversion rates and increased return on investment (ROI).

3. Facilitates sustainable growth: In a study by Wunderman, 79% of consumers said they are more loyal to brands that understand and care about them. 

Zero-party data helps understand your customer preferences and needs to lead to better customer retention and reduced churn rates.

4. Increased customer trust: A survey by Salesforce found that 92% of customers are more likely to trust a brand with their data if they have control over how it's used. 

Businesses can build customer trust by obtaining zero-party data through transparent and value-driven interactions.

5. Enhanced products and services: Zero-party data provides valuable insights into customers' preferences, pain points, and expectations. 

Businesses can use this data to develop or improve products and services to align closer with customer needs. The results lead to higher satisfaction rates and positive word-of-mouth.

Collecting zero-party data in the right way takes work. Due to rising cybercrimes and masquerade attacks, consumers are more cautious about sharing personal information. 

Furthermore, regulations like GDPR and CCPA have imposed stricter requirements for obtaining explicit consent, making it even harder for brands to gather data.

How to Collect Zero-Party Data?

If you want to ensure your data collection strategy is on-point, below are a few ways to help you strike a meaningful conversation with your customers and prospects.

1. Sign-ups or Subscriptions

When a customer downloads your app or subscribes to your newsletter, it is a great way to collect zero-party data. You can ask them questions like:

• What language are you comfortable in?

• Which region do you live in?
• What kind of content would you want to receive?

Source:  Hopetambala

2. Post-Purchase Survey Form

After a customer completes a transaction, take that as an opportunity to gather zero-party data. Give satisfaction surveys to collect more information about your products or services. 

Use questions like "How did you hear about us?" The responses will help you understand which marketing channels work better than others. 

You can also ask, "What kind of emails or recommendations would you want to receive in the future?" The answers will enable you to send content they like and look forward to interacting with.

Source: Feedier

3. In-Product Form

There are different ways to gather zero-party data for every type of business. 

For SaaS businesses, integrating a user-friendly and efficient form directly into your product can provide invaluable insights into trial users, preventing churn proactively. 

You can include questions like:

• How long have you used this product?

• What's your most-used feature?
• Where would you like to see improvement? 

These questions identify specific features that resonate with different customer segments, usage patterns, feature performance, and pain points to prioritize product enhancements.

Source: React.js Examples

4. Chatbot on the Website

An effective zero-party data strategy means being able to ask for critical qualifying information from your visitor. 

To do this, you can build a product/job recommendation quiz funnel and use questions like:

• What are you looking for?

• What is your email address?
• What are your contact details? 

Narrow the questions down to your business offerings. The responses will help in targeted assistance, lead generation, enhanced sales opportunities, and business outcomes.

Source: Digioh

5. Interactive Emails 

Emails are another great way to gather valuable zero-party data. With AMP email technology, brands can embed forms, interactive quizzes, gamification, and more within emails. They encourage users to engage and fill in the information quickly and easily. 

Questions in the email should send tailored messages and discount offers on a special day, fostering long-term loyalty and advocacy for the brand. You can use questions like:

• What is your name?
• When is your birthday?
• Which gender do you identify with

Source: Netcore Cloud

6. Contests

Users love to get discount coupons, vouchers, and gift cards. Offering one becomes an exciting way to get zero-party data in exchange. 

Ask your consumer questions like "What is your skin type/ hair type/body type?" (if you are in the line of cosmetics or health). Having the buyers "Tag friends and family" will help you get details about their connections as well. 

Contests offer an opportunity to grow the customer database and enrich customer profiles for more effective marketing.

Source: Canva

 4 Proven Ways to Leverage Zero-Party Data

Now that you know how to collect zero-party data, it's time to leverage it to the fullest to stay ahead of the competition. Here’s how you can make meaning out of the gathered data and craft your marketing strategy:

1. Analyze Data to Re-Align Your Marketing Strategy

Getting zero-party data is challenging. Initially, you may only have a small sample. However, if you follow the suggestions given above, you will be able to gather enough information to spot patterns. 

You can make an argument from the gathered zero-party data for redistributing your marketing budget and revisiting your marketing strategy. 

Also, you can create audience cohorts based on preferences or goals to assess Customer Lifetime Value, loyalty, or propensity to churn.

 2. Enhance Customer Journey With Data Orchestration 

Ensure that all the zero-party data you collect is instantly synced to the platforms you use to manage your email and SMS marketing automation and campaign platform.

Once the gathered zero-party data is in your marketing platforms, you can personalize your workflows to send content based on users’ essential information. 

3. Implement Progressive Profiling for Continued Personalization

Gradually collecting additional layers of zero-party data through follow-up interactions with customers helps brands better understand their audiences' changing needs and priorities. 

The questions in the example are follow-up questions that can help deliver relevant content about customer intent. 

Gathering zero-party data with constant follow-ups minimizes wasted effort on campaigns based on past purchases.

4. Align with AI Tools to Predict Purchases

AI algorithms can utilize zero-party data and historical customer information to predict future behavior and preferences. This lets businesses anticipate customer needs and proactively engage them with relevant offers.

Also, AI-powered sentiment analysis can extract insights from customer feedback obtained through zero-party data. It helps businesses to address concerns promptly and improve overall satisfaction.

Things to Watch Out For

Zero-party data represents an untapped goldmine for businesses in today's data-driven landscape. 

As data privacy regulations evolve, companies must ensure that they obtain and use zero-party data in a compliant and ethical manner to maintain customer trust and achieve long-term success. 

Respect for user privacy must be a priority when implementing zero-party data strategies, as it will mitigate the risks associated with data breaches or non-compliance. 

Several privacy laws and regulations govern data collection practices to ensure businesses uphold user rights and maintain data integrity. Some of these laws include:

• General Data Protection Regulation (GDPR): Enforced in the European Union, GDPR sets strict guidelines for the collection, processing, and storage of personal data, empowering users with control over their information and imposing hefty fines for non-compliance.
• Electronic Communications Privacy Act (ECPA): Regulating electronic communication and data interception in the United States, ECPA safeguards users' privacy rights and restricts the interception of electronic communications without consent.
• Email Privacy Act: Aimed at protecting email communications in the United States, law enforcement must obtain a warrant before accessing email content.
• The CAN-SPAM Act: Focused on regulating commercial email communications in the United States, CAN-SPAM mandates businesses to provide clear opt-out options and truthful sender information in email campaigns.
• Gramm-Leach-Bliley Act (GLBA): Governed by the US Federal Trade Commission (FTC), GLBA safeguards consumer financial information, imposing strict guidelines on financial institutions' data handling practices.
• Financial Industry Regulatory Authority (FINRA): Regulating the financial industry, FINRA enforces data protection measures to ensure the confidentiality and security of customer data.
• California Consumer Privacy Act (CCPA): Enacted in California, this privacy law grants California residents control over their personal information and requires businesses to disclose data collection practices and provide opt-out options.
• Health Insurance Portability and Accountability Act (HIPAA): Focused on protecting healthcare information in the United States, HIPAA requires healthcare providers to maintain data privacy and security.

Upholding privacy laws ensures legal adherence and fosters a responsible and respectful approach to data collection in today's digital age.

It's important to note that the success derived from leveraging zero-party data can vary depending on each business's specific strategies and approaches.