Personalization and privacy have become table stakes for every retailer. Brands must safeguard the data they collect while going deeper than ever before to collect consensual, actionable data. In other words, they have their work cut out for them.
Most marketers try to balance these obligations by doubling down on first-party data, which is a good strategy. But a different, more powerful method can take customer relationships to the next level: zero-party data.
What is zero-party data?
Zero-party data, or 0P data, is information that customers intentionally and proactively share with a brand. This often includes:
- Email addresses
- Phone numbers
- Customer feedback
- Preferences
- And more
Brands typically collect 0P data via surveys, contests, loyalty program forms, quizzes, and onboarding.
Zero-party data provides the most direct customer insights. It yields the best results when used in conjunction with first-party data, which illuminates how customers move online. To develop a robust data and marketing strategy that maximizes their potential, retailers need to start by understanding the distinctions between these different types of data and how combining them can supercharge marketing efforts.
Why every marketer needs a zero-party data strategy
Evolving privacy legislation and increased consumer awareness have hamstrung third-party data. In its place, zero-party data delivers powerful insights that lead to superior personalized customer experiences and full data transparency — with profitable results.
Superior accuracy
One reason 0P data drives incremental value for brands is its accuracy. Zero-party data is more precise than 3P or 1P data because it doesn’t rely on inferences. Instead, insights come from what consumers are literally saying about their own behavior. So rather than using a customer’s browsing history (i.e., 3P data) to assume their interest, marketers could, for example, launch a pop-up survey about their interest in a product to get a direct look into the customer psyche.
Hyper-personalization
Insights from zero-party data make it easier to target the customers who deliver the most value. That’s why it’s the premier way to personalize and segment marketing campaigns. By refining audience cohorts you can send content that’s more likely to engage each group.
For example, a health and wellness brand may send out quizzes to find out the types of workouts customers like most. Based on the results, the brand could introduce new offerings like high-intensity workouts and post-pregnancy exercise routines. With predictive targeting, they can enable further personalization by aligning these new offerings with the customers most likely to want them. As your offerings expand to fit their needs, and you send them custom content and offers based on their preferences, they’re more likely to buy again.
Data security and privacy compliance
Most critically, 0P data ensures privacy compliance — unlike third-party and second-party data, which often lack consent or clear security measures. Stringent regulations, like the California Consumer Privacy Act (CCPA) & California Privacy Rights Act (CPRA), the EU’s General Data Protection Regulation (GDPR), and the Personal Information Protection and Electronic Documents Act (PIPEDA) in Canada, prohibit data collection without consent. With 0P data, you’re automatically compliant — its very nature ensures consent — which means you avoid the hefty fines associated with violations. The bottom line: eliminating 3P collection practices isn’t a sacrifice — 0P is better all around.
Why you should optimize your marketing strategy with zero-party data
Zero-party data can be used in myriad ways, such as personalized messaging, custom site experiences, new products, and more — all keys to elevating your brand and boosting revenue.
Personalization drives more conversions
Personalization is a core use case for 0P data. This strategy improves customer satisfaction and increases conversion rates because customers are more than willing to buy goods that suit their needs — especially when they have a relationship with the brand offering them. In fact, 80% of companies report an uplift in conversion after implementing personalization.
Automation tools and content management systems will help you create individualized experiences across channels. For example, you could offer customers personalized product recommendations based on their quiz responses.
To do this, you need a significant volume of data, often from a large sample of customers. Panorama AI makes collecting this data simple.
⚡️Panorama Powerplay: Understand your entire customer base using synthetic customer preferences and attributes. When a small portion of customers submit 0P data, it can be used to infer preferences for similar customers.
Customer feedback helps you improve products and services
Collecting 0P data on your products and services also provides insights into customer expectations and needs. This yields dividends — 84% of companies that make changes based on their customer experience report see an uplift in revenue. By using zero-party data to inform product expansion, they’re able to meet customer needs without guesswork.
To leverage your 0P data in this way, look for ways to solicit customer feedback. For instance, you could send customers surveys on their service experience after they talk with one of your representatives. Or track product reviews and returns. All of these data points inform how your products and services are doing and can be used to improve the customer experience.
⚡️Panorama Powerplay: Supercharge these findings with Panorama ID to safely track anonymous customers across sessions for far longer than standard cookies allow. Understand how customers travel between each stage and illuminate the entire customer.
Customer engagement increases retention
Zero-party data also helps you create incremental revenue through customer retention — a far more cost-effective way to fuel revenue growth than leaning on acquisition. Simple tricks like quizzes, polls, and social media engagement can help you collect relevant zero-party data for building out your marketing segments. Then you can use this data to enhance customer engagement, which increases repeat purchases, customer lifetime value (LTV), and referrals.
For example, a skiwear retailer may send a survey revealing that 60% of their customers prefer daily SMS updates to email. The retailer then creates an SMS opt-in service to match their preferences. Since their customers prefer this sort of outreach, they engage with the brand more. These highly engaged customers have a 306% higher LTV.
⚡️Panorama Powerplay: Use Panorama AI to view customer LTV and Likelihood To Purchase in real-time. Then use personalized offers to drive engagement with those users.
Another downstream benefit of this increased engagement and loyalty is an improvement in word-of-mouth marketing and customer referrals. For hard-to-reach prospects, an endorsement from an existing customer goes much further than almost any targeted marketing can. In fact, customer reviews are the most important factor in purchasing decisions.
Best practices for a bulletproof 0P data strategy
While making the switch from third-party to zero-party data requires an upfront investment, the benefits of 0P data collection easily justify the costs. For example, when a retailer prompts customers to take a style quiz, they gain a rich data profile that allows them to more precisely target customers with products they want and offers they’ll use. The revenue brought in from hyper-personalization justifies the cost of investing in it.
This also makes it worthwhile to build your 0P data strategy with effective data collection methods and actionable objectives.
Define clear data objectives
To collect zero-party data effectively, you need a clear purpose in mind. Whether it's targeted email campaigns, personalized product recommendations, or better customer support, a specific purpose will help guide your data collection strategy. Moreover, it ensures the data's legal compliance, as under many data privacy laws, the use case for the collected data must be clearly aligned with your data strategy.
To define your objectives, follow these three steps:
- Analyze your current data strategy and the customer data you already have to identify knowledge gaps or conflicting information. This ensures you see returns on new data investments.
- Evaluate your entire customer lifecycle and assess customer engagement with each touch point. This can tell you where it makes sense to engage with customers and what you could learn from them at different stages.
- Center data collection around knowledge gaps to stay in compliance with data privacy laws, optimize your marketing spend, and facilitate strategic alignment across your organization.
Choose your data collection methods
Once you know why you’re collecting data, you can determine the method and medium for doing so — e.g., surveys, quizzes, account registration, etc. When picking between these strategies, consider factors like:
- Audience preference – What’s the best way to reach your target audience? Do they prefer texts or in-app messages?
- Data granularity – How specific does the data need to be for it to be useful?
- Scalability – Can you repeat this collection method over time as your customer base grows?
This ensures that you’re not just getting the right data but that it’s also relevant, accurate, and usable across different contexts for your company over time.
For example, multiple-choice quizzes are a scalable data collection method since they don’t require evaluation of open-ended answers. It’s reasonable to reconcile and assess the data, no matter how many people complete the quiz. For more granular data, you might ask direct questions, such as how the customer would prefer to be contacted in the future.
Establish robust data governance and security practices
Defining your objectives is a core aspect of many government regulations. You’ll also need to disclose how you’ll collect, store, and use the data. However, data governance doesn’t stop there. Your organization still needs company-wide data storage policies and industry-standard security practices. After you’ve invested so much time and money into collecting 0P data from your customers, you must maintain their trust and certify that bad actors can’t access their personal information.
Robust security policies also ensure compliance consistency across your organization and mitigate risks associated with that compliance, like data misuse. For example, implementing authentication mechanisms (such as two-factor authentication) ensures that only authorized personnel can access your data and minimizes the chances of a breach. In other words, zero-party data is your treasure — so guard it like a dragon guards its horde.
3 easy collection methods to kickstart your zero-party data strategy
Following best practices ensures your 0P data is safe, but that your strategy is sustainable as you scale. The right, 0P data makes the customer experience more interactive and engaging. Many brands start with these three simple methods because they are easy ways to collect the data you need while enhancing the customer experience.
1. Quizzes
If you want customer insights about preferences and interests, quizzes can be a powerful way to collect zero-party data quickly. Customers tend to love quizzes because they get more relevant product suggestions, discounts, and more. It’s a fun, interactive exercise that’s easy to do. In fact, quizzes generate higher engagement across all industries; 40.1% of the people who begin a quiz will provide brands with valuable insights.
Customer preference info generated from quizzes also enables enhanced personalization, resulting in more conversions. For example, Ashley Homestore used Panorama AI to launch an immersive customer experience that used a preference quiz to collect 0P data. The result? A 66% increase in ROAS on Facebook.
2. Post-Purchase Surveys
If you’re looking for a deeper understanding of the customer journey, post-purchase surveys are the way to go. Surveys reveal critical customer behaviors, such as whether they intend to buy from you again. The good news is, customers who have already purchased your products want to give you their feedback — 77% of them will view you more favorably if you apply it, too.
The zero-party data collected via these surveys gives you a wealth of opportunities for personalized marketing and upselling.
Let’s say a customer who just purchased a kitchen blender answers a survey about the overall buying experience and provides insights into other devices they may want in the future. This could inspire additional blender settings (smoothie, slushie, etc.) or the creation of other kitchen devices like hand-held milk frothers.
3. Social Media Content
Another great way to gather consumer insights: social media polls and interactive stories. These tactics are successful because you’re meeting customers where they already spend so much of their time — an average of 2.5 hours each day.
Presenting your brand in an organic space like socials also makes your brand’s relationship with the customer seem more natural. You get instant feedback on products, ideas, and trends, and you can easily see and track how people react to your content via likes and responses.
For example, a beauty brand can post a poll on Instagram asking customers about their favorite lipstick shades. Their followers weigh in, and the brand can personalize future content based on how each person responds. They can also see which products are crowd favorites and offer more varieties of those shades and formulations.
There is one catch, however. To triangulate this 0P data, you need customers' social media handles to your data set. The good news is you can easily obtain them through loyalty program onboarding surveys or signup offers.
Panorama AI helps you use zero-party data to make every customer experience personal
- A unified, privacy-first data platform – Panorama is the only privacy-first personalization platform that helps retailers holistically understand customers and tailor every interaction to enhance revenue and gain a competitive advantage. Focus on driving business value while our team safely collects and synthesizes your data.
- Cutting-edge personalization — Industry-leading AI models that predict customer behavior and enable tailored engagement to make every part of your organization operate more intelligently.
- Identity resolution and tracking – Panorama ID provides cross-session, cross-device tracking that builds end-to-end customer understanding.
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