How to extract value from zero-party data

The third-party cookie is going away, and with it a big chunk of third-party data. Smart marketers will seek first-party data — gathered, for example, through transactions or website forms — to fill in their data gaps. But what if you were to persuade the customer to just give you their data? That is the simple definition of “zero-party” data.

Call it a concept or a buzzword, zero-party data provides another avenue to personalize marketing efforts. This goes beyond the basics of first-party data — name, e-mail address, charge card, and a record of purchases. A marketer will have a better sense of what a customer likes via the zero-party route, rather than trying to guess what they will buy next based on what they bought last.

What does zero really mean?

The term zero-party data was first coined by Fatemeh Khatibloo, VP principal analyst at Forrester Research. The term “declared data” might be a better descriptor, but Khatibloo placed the concept within the tiered hierarchy of first-, second- and third-party data.

Basically, zero-party data communicates a personal preference, be it the color of an item, clothing or shoe size, quantity, a birthday, how you wish to receive information, or even page settings.

“So here’s the secret, we’re already gathering a ton of zero-party data. We just don’t use it that well.” said Nirish Parsad, privacy/martech lead at performance marketing firm Tinuiti. “All these datasets can help you better understand and personalize to your customer,” he said. “Everything is a signal.”

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Tell me about yourself

“A short ‘this or that’ quiz…works well. Keep it short, no more than three to five questions at a time, so it doesn’t feel overwhelming,” explained Tom Treanor, CMO of enterprise CDP Treasure Data. “This type of data can help determine things like topic or product interests, psychographics, and communication preferences. When you need to go back and ask for more, it can be on one topic that pops up on the site or in the app (or can be a short email).”

“There is absolutely nothing wrong with building interactivity into your content. From calculators, to quizzes, configurators, polls, games, etc… These are all amazing ways to deliver value to customers while ensuring that you’re getting high quality data that can be used for your strategic purposes,” said Robert Rose, consultant at The Content Advisory.

The well-placed question can reap data dividends. Amanda Elam, CMO of commerce experience cloud Bloomreach, offered several examples. Take Netflix, which asks viewers to rate a movie or show up or down once it ends, which then shapes future recommendation for programming. Baby Walz, which provides baby clothes, will ask users to provide “the due date and the gender of your baby and we will send recommendations”. Macy’s might ask an online shopper for their shoe size to keep on file until their next purchase. “Building a relationship digitally is the same as a human-to-human interaction,” she said.

The goal is to build a personal relationship with the customer without getting too personal.

Rose framed the problem this way: If you don’t feel good about answering a question that could provide a better search result or a better product offer, then the question was probably creepy. “The same test holds true with data.  Are you willing to tell the customer why and how you plan to use the data they are providing? That’s how we can avoid being rude or creepy about it.”

Take something as simple as wishing a customer “Happy birthday!” “If it is a retailer and you get a discount that month, that’s a win-win.” said Treanor. “But if it’s coming from a bank or doctor you haven’t visited or done business with in a few years, it could be annoying.” Bad timing “sends a message that you don’t truly know the consumer. This can drive a wedge between the brand and the consumer’s loyalty.” Treanor said.

All agree that it pays to be upfront and honest with the customer when you tell them how you will use their data.

 “Ikea did a nice job of this about two years ago when it announced how it would continually add control options for customers shopping on their site about what data they are sharing.” Rose said. “But we can do the same thing.  I’ve always maintained that data and privacy is NOT a legal and compliance challenge, it is a content, marketing, and design challenge.’

The customer must perceive value in providing their information, Elam said. Going back to Netflix, the customer sees value in the initial offer, the company provides the opportunity to customize that relationship, and that yields a recommendation to watch a show or movie. Compare this to Facebook, where the platform is used by the customer for one purpose, only to get a recommendation that has nothing to do with their first interaction, Elam explained.

What marketers can do

Rose was pretty clear about step one: Stop calling it zero-party data. “It’s just first-party data – with the distinction of how it was acquired.” Second, examine the customer experience and focus on how to deliver more personal and relevant value. Finally, design content experiences that deliver value and get customers to share more data with you.

Perhaps the most important element is behind the screen. Elam stressed the fusion of the marketing team, ecommerce team and product team. Together, they can create a competitive advantage if they can understand the customer and point of conversion. “This is not a marketing activity in and of itself,” Elam said.

Parsad suggested this strategy: Create a “preference center” for the consumer, where they can park their personal information with the brand and update their preference over time. “My site experience gets worse as you keep pushing products I’m not interested in. A preference center could solve this problem. It also makes personalization much easier. No more guesswork!” Parsad said.

Treanor offered this checklist:

• Have a customer data strategy. Who’s in charge of customer data for your company  or organization and where will it be centralized.
• Start simple. Request their name and email in exchange for a one-time discount. 
• Gamify. Implement quizzes to learn more about interests and preferences, but keep it short.
• Make favoriting easy.  Whether it’s songs or clothes, add like or heart buttons on your site or app, so you’ll be able to collect preferences easily during visits. 
• Personalize. Provide personalized messages and recommendations based on their interests to reinforce the value of providing the information.