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What is Zero-Party Data?

Brand trust is a priceless commodity that comes from having an authentic relationship with consumers. To effectively build that relationship, marketers need data that comes directly from the customer, and they need to collect it in a privacy-compliant manner. It’s a challenge that’s become urgent due to recent industry privacy changes (such as Apple’s Identifier for Advertisers (IDFA) and Google’s phaseout of third-party cookies) and planned amendments and expansion to the California Privacy Rights Act

The problem is that privacy concerns keep many consumers from sharing personal data. And regulations to protect consumer privacy are creating even more challenges. It’s a conundrum that Gartners says has put marketers “under a digital ad siege”.

The solution is zero-party data. Zero-party data is the most accurate and highest quality data available because it comes straight from your audience and explicitly indicates their desire to engage with your brand. It’s the data you need to effectively acquire customers and build lasting relationships with them. 

Read on to learn more about what zero-party data is and how you can begin to harness the new gold standard in consumer data.

Types of Consumer Data, Explained

Before we dive into the details of zero-party data, let’s take a look at the other types of consumer data marketers typically collect and use.

First-Party Data

First-party data is information about your audience collected directly by your brand, usually in a passive way. You’re likely already gathering first-party data, such as:

  • How an online visitor interacts with your site (tracked with a first-party cookie).
  • A customer’s purchase history (stored in your e-commerce platform or CRM).
  • When an email recipient clicks on a link (measured by your email service provider). 

This kind of data is fairly trustworthy and valuable. If you’re following best practices like cookie consent managers, the collection methods should be privacy-friendly.

Second-Party Data

Second-party data is, more or less, another company’s first-party data that you purchase or share through a partnership agreement. With second-party data, you ideally know that it was collected directly by your trusted partner, with proper consent. 

You don’t have control over second-party data like you do with zero- or first-party data, but you should have some measure of transparency and visibility.

Third-Party Data

Third-party data is the kind that’s under scrutiny right now. This kind of data is collected by an entity that doesn’t have a direct relationship with your audience, like an aggregator or ad tech provider that organizes and sells data. Third-party data is usually stitched together from different sources, including third-party web cookies that follow consumers around the Internet. It’s these cookies that browsers like Safari and Mozilla are already blocking by default, with Chrome soon to follow suit.

Third-party data relies on inferences, not clear intent, and is rife with privacy concerns because you usually have no way of knowing whether audience members agreed to have their information collected and sold.

Learn how to build lasting D2C relationships with zero-party data.

What’s the Difference Between Zero-Party Data and First-Party Data?

Although zero- and first-party data are similar, there are important differences:

  • Zero-party data is proactively given by the consumer, not passively collected.
  • Zero-party data usually involves a clear value exchange. 

With zero-party data, audience members freely provide companies with information about themselves to receive a benefit or perk—like loyalty points, a special discount, or more relevant content or product recommendations. 

Zero-party data is incredibly valuable and powerful because it:

  • Is self-attested and verified—no inference needed.
  • Signals high consumer intent.
  • Reflects an exchange of value, which builds trust and strengthens the relationship between consumer and brand. 

We’ll dive into more real-life examples in the next sections, but the key distinction to remember is that your audience willingly provides zero-party data. They want you to have this information and are fully aware they’re giving it to you.

What Are the Benefits of Zero-Party Data?

Zero-party data is more reliable, actionable, and has higher quality. It gives you what you need to build trust with your audience. Investing in zero-party data over third-party data isn’t a compromise—it’s a win.

Below are just a few examples of the benefits of zero-party data.

Deepen Your Audience Understanding

When your audience shares personal insights, you can gain a richer understanding of what motivates them, what they value, and how they want to interact with your brand. This kind of zero-party data tends to be much more impactful than demographic data like zip code or gender when it comes to building truly personalized marketing strategies.

For example, travel brand CheapCaribbean began offering exclusive discounts to nurses—a tactic known as identity marketing. To take advantage of their special pricing, nurses had to confirm their employment status through SheerID’s Identity Marketing Platform

Research shows that nurses identify strongly with their profession, so knowing a customer was a nurse enabled CheapCaribbean to create personalized campaigns that targeted this lucrative audience. The initiative was so successful that the company added teachers, military members, and other consumer communities to its identity marketing program.

Collect Data Securely & Build Brand Trust

Consumers are increasingly concerned about data privacy. Surveys show that misusing personal information is a leading cause of distrust in the tech industry. 

Zero-party data respects your audience’s right to privacy by putting them in control of what personal information they disclose and when. Consumers are invited to share information in exchange for something of value, and when a company delivers on that promise, it launches a brand relationship built on trust and authenticity. 

And zero-party data protects brands as well. When you collect data directly from customers, you retain full control over its security and can take steps to ensure accuracy. For example, when the meditation app Headspace began using SheerID to verify teachers for its teacher discount, instances of fraud fell by 41%.

Acquire Your Best Customers

Building richer audience profiles based on zero-party data empowers brands to attract and acquire their ideal customers. As you understand more about your existing customer base, you can begin to focus on and engage prospects that share attributes with your most loyal customers. Targeting lookalike audiences on ad platforms can help you reach prospective customers who are more likely to respond to your offers and value propositions. Casting a wider net based on less reliable third-party data simply can’t do that.

For example, direct-to-consumer mattress brand Purple knew that its made-in-the-USA ethos would resonate with the military, so it offered them an exclusive 10% discount.  By targeting relevant, military-friendly groups on social channels like Facebook and Pinterest and using imagery designed to attract this audience, Purple attracted military customers to its website. And when the brand digitally verified their military status, it collected zero-party. 

The campaign drove a 6x increase in conversions and generated an ROAS of 25:1. The results were so impressive that Purple doubled down on its strategy and launched identity-based offers for students, teachers, first responders, truckers, and healthcare workers. Together, Purple’s identity marketing programs grew to generate 10-15% of all its online revenue.

Grow Customer Loyalty with Truly Personal Campaigns

Customer loyalty requires personalization, but consumers are increasingly concerned about privacy, which makes creating personalized campaigns a challenge. It’s a catch-22 that’s leaving marketers feeling trapped. 

Zero-party data can help resolve this tension. Customers willingly provide it, and it gives you insight you can use to create advanced personalization.

When you know your audience’s life stage or profession, for example, you can design campaigns to reach them on holidays or occasions that carry special significance. Retail giant Target offers a 15% discount for teachers during back-to-school season, and brands like Nike, Vineyard Vines, and Bed, Bath & Beyond create meaningful interactions with the military community with Veterans Day campaigns. These kinds of personalized experiences help build goodwill and brand loyalty among consumer communities—and those who support them.

Additionally, you can integrate zero-party data into your customer loyalty program to add more personalized messaging and visuals at every touchpoint. Craft retailer Michaels integrates exclusive offers to seniors, teachers, and military members into its Michaels Rewards program and engages these valuable customers throughout the year with targeted emails, social media posts, and web banners.

When Headspace offered teachers an exclusive discount, they collected zero-party data and reduced fraud by 41%

How to Collect Zero-Party Data

Collecting zero-party data should happen on a continual basis, not just during sign-ups or purchases. (Just be careful not to inundate your audience with requests for information too frequently.) 

Here are a few examples of opportunities across channels, all along the customer journey, to ask customers to share information—or use the knowledge you already have to deliver a more personalized experience.

Offers and Discounts

When consumers are asked to answer questions in order to receive a discount or special offer, the value exchange is clear. For example, SheerID helps brands collect and verify information about employment or life stage to provide exclusive discounts to the military, teachers, students, seniors, and more.

Registration

When customers are signing up for an online account, a newsletter, an app, or a loyalty program, ask a few simple questions to tailor the content or offerings they’ll receive. This sets the stage for an interactive relationship from the earliest moments.

Quizzes

Emails, social media posts, and blogs are all ripe opportunities to include helpful or entertaining quizzes. An online travel marketplace could ask, “Where should you plan your next summer vacation?”, or a marketing agency could evaluate, “How does your company’s SEO strategy stack up?”

Pre-Purchase Questions

Pre-purchase questions can help a customer find their ideal product while providing valuable insights about their habits or preferences to a brand. For example, a clothing retailer could ask about sizing, favorite styles, or favorite colors during an online shopping experience.

Post-Purchase Surveys

Brands can gather valuable personal insight through post-purchase surveys. For example, an outdoor gear purveyor could ask what kind of activities a first-time purchaser enjoys. 

Chatbots

Using Instagram DMs, Facebook Messenger, or chatbots on your website provides more than just streamlined customer service or sales support. These conversational marketing tools also give you a chance to collect valuable information about your consumer’s needs, preferences, or demographics in an engaging but automated way.

SMS Messages

Like chatbots, SMS text messages offer a golden opportunity to share quick questions or guided polls with your audience members. For example, a hotel brand could send an SMS survey on a guest’s last day, asking about the reason for their stay and what they loved most—while offering late check-out as an incentive for participating.

Customer Support

With the right tools in place, your support team can help gather and record valuable insights they learn during customer calls or emails. Syncing customer data from all platforms can be challenging to implement, but in today’s age of zero- and first-party data, it’s well worth the investment.

Special Occasion Email Promos

Ask for a customer’s birthday as part of your registration process, then send an offer or perk as a surprise on their special day. Or, if you know a customer’s profession or life stage, recognize them with tailored content or an extra discount on days that celebrate their community (think of special dates or seasons like National Nurses Week, back-to-school season, Grandparents Day, or National First Responders Day).

Preferences Center

A clear, concise email preferences center makes it easy for subscribers to indicate what kinds of emails they want to receive, and those they don’t. This gives you information you can apply across their entire customer experience. 

In addition to frequency and types of emails, you can also ask about areas of interest. Premium cookware brand Le Creuset asks subscribers about their favorite color and whether they consider themselves a basic cook, an amateur foodie, or a professional chef. 

Collecting this kind of zero-party data upfront makes it simple to ensure content across all channels is more relevant—and conversion-focused—down the road.

Learn how TIDAL is using zero-party data to drive customer loyalty.

Integrating Zero-Party Data Across the Customer Lifecycle

Best-in-class brands use a comprehensive approach to continually collect, integrate, and use zero-party data across the entire customer lifecycle. 

For example, global athletic brand ASICS combines zero-party data (including employment verification for discounts and personal info collected when signing up for the OneASICS loyalty program) with first-party data (such as purchase history and behavioral data from running and race registration apps). ASICS layers this information together to develop a full picture of their most loyal customers and deliver tailored content and experiences. 

Say a customer signs up for OneASICS and self-identifies as a male living in Boston and then browses tennis products on the ASICS website. ASICS will respond by providing him with both tennis and cold-weather running content in emails, within the app, and across other channels. 

By leveraging zero-party data as part of its privacy-friendly approach to personalization, ASICS has seen significantly higher lifetime value among loyalty members and double-digit growth within their program month over month.

Getting Started with Zero-Party Data

While it can take considerable time to build up an end-to-end integrated data program, there are simple ways for brands to start collecting and leveraging zero-party data to achieve swift results. 

With SheerID’s Identity Marketing Platform, you can begin to target and reach relevant consumer communities with exclusive discounts within days. Running identity marketing programs enables you to attract new customers, deliver valuable insights, and demonstrate the value of investing in zero-party data.

Want to Learn More About Zero-Party Data?