The Problems with Zero-Party Data and How to Address Them

Brands need accurate customer information to build engaging marketing campaigns, but the shift away from their traditional sources due to third-party data deprecation is leaving many with a dearth of data. As third-party cookies disappear, zero-party data is stepping into the spotlight as a promising alternative. But plenty of marketers are left unsure what this type of data is, how to use it, and if it’s even worth investing in. 

SheerID commissioned Forrester Consulting, the marketing research giant, to conduct a comprehensive survey and published the results in “The Data Deprecation Challenge and The Promise Of Zero-Party Data.” The study examines how brands are struggling to overcome the effects of data deprecation and their vision for how zero-party data can help them achieve their goals. 

Over the next couple of weeks, we’re going to unpack different aspects of the report to contextualize the findings. This week, we’re looking at the challenges associated with zero-party data—and how marketers can overcome them.

The Problem: As with all new terms, there’s confusion as to what it is. Zero-party data is no different. In this report, 34% said they are unsure how zero-party data fits into their broader data strategy. Many marketers think “zero-party data” is just a trendy buzzword for first-party data. But zero-party data is a distinct type of data and the richest kind marketers can collect. So what is it and how will it help you?

The Solution: Zero-party data is information that consumers willingly provide in exchange for something of value, such as an exclusive discount or targeted product recommendations. Zero-party data is highly accurate because it comes directly from the consumers and signals a high intent to engage more deeply with a brand. And because it is willingly provided, marketers typically receive higher engagement rates in re-marketing campaigns because consumers are expecting additional communication.

The Problem: Consumers are more conscious of data-privacy concerns than ever, and many are worried their personal information may be sold and misused without their consent. They are aware that even engaging with a brand could lead to unwanted data collection, so many guard their interactions carefully.

This puts marketers in a tricky spot; how do you collect zero-party data if consumers are reluctant to share personal information? According to the Forrester study, 32% of marketers are concerned that customers will not share zero-party data, and 33% are unsure how to ask consumers for zero-party data. 

The Solution: There are many efficient, cost-effective methods to collect zero-party data. The key is to find the right incentives, including: 

• Welcome Offers: A great way to start off your relationship with a first-time customer is to give them an introductory offer. This can be triggered when you notice a new person is on your site. Allow them to add a few pieces of basic information in exchange for an introductory offer. 
• Newsletter Signup/ Account Registration: This is similar to a welcome offer, but instead of providing an upfront discount, you win customers over with an offer to stay current with your newsletter. 
• Pre-Purchase Questions/Post-Purchase Surveys: Asking pre-purchase questions helps you tailor product recommendations to customers while also learning more about what your visitors want. You can also share surveys after a customer makes a purchase to unearth further insights about your customer base.
• Gated Offers and Discounts: Most customers are happy to share information about themselves in exchange for an exclusive offer. When you offer special deals to consumer communities like the military or college students, you gather valuable personal information about a customer, such as their profession or life stages. Brands such as Gainful have found impressive success with this method of collecting zero-party data. Like most people, their customers are genuinely excited to share information when they feel recognized and rewarded. Gainful uses SheerID’s Identity Marketing Platform to verify the data it collects, which prevents fraud and assures customers that their data is being collected in a privacy-friendly manner.

The Problem: Even though zero-party data comes directly from the customer, brands still need to know the data is accurate. In fact, 36% of marketers worry about the accuracy of zero-party data, even if customers are given something of value when they provide it. These brands want a reliable way to verify the data they gather is high-quality. Who wouldn’t?

The Solution: Offering an incentive in exchange for customer data encourages honesty, particularly if the value of the incentive depends on accurate information. For example, it behooves a customer to be truthful when filling out a survey to help them find the best foundation shade for their skin tone; otherwise, they won’t get accurate product recommendations. 

Brands can also do what Gainful did and use a platform like SheerID to digitally verify a customer’s data before giving them the reward. This process instantly verifies a customer’s eligibility for the reward, which reduces fraud and ensures the data’s accuracy.