What Is Zero-party Data And Why Is It Necessary For Business?


Zero-party data is information from customers that they voluntarily and deliberately share with you. You acquire it through quizzes/polls, website activity, customer profiles, messages with customers, etc., so it doesn’t require any collection of cookies data, also known as Third party data. Learn more about this interesting new marketing trend which Forbes recently called the new fuel.

What is Zero-party Data?

Zero-party data is customer data that the customers share voluntarily and explicitly with the organization, usually in exchange for value. For example, in our case, we collect facial data like skin shade, undertone color, etc., from our client’s shoppers to recommend best-suited beauty products. Our clients use this data to improve the shopping experience on their websites and build deeper customer relationships. 

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Other zero-party data examples include preferences, interests, needs, and wants. This data is collected through surveys, loyalty programs, contests, or other engagement initiatives that we will discuss later in the article.

Organizations can use zero-party data to build better-personalized experiences for their customers, like understanding their exact pain points and giving them tailored solutions. This data can also be used to understand customer behaviour and trends better. By understanding what customers want and need, businesses can make more informed decisions about product development, marketing, and sales strategies. 

While zero-party data is voluntary and explicit, it is essential to note that it must be collected in a way that is transparent and compliant with all applicable laws and regulations.

Organizations should only collect the bare minimum amount of data necessary to achieve their business objectives which also makes sense because overdoing it will consume a lot of time and may even raise a concern about why you are asking so much. Also, shoppers should always have the option to opt out of providing information they are uncomfortable sharing.

Why is Zero-party data necessary for business?

Zero-party data is customer data that is collected and managed proactively and with the customer’s explicit consent. This type of data is necessary for businesses because it provides first-hand insights that are essential for driving personalization, building trust, and developing long-term customer relationships.

First-party data is the most valuable type of data for businesses because it is said to be the most accurate information you can have about your customers (or shoppers). It also offers rich insights into customer behavior, preferences, and needs. Hence First-party data collection is always preferred by the eCommerce business.

Third-party data is valuable for its ability to supplement first-party data, but it has several limitations. Third-party data is often inaccurate, incomplete, or out of date. In addition, obtaining reliable third-party data can be difficult, with many discussions to stop it is already going on. Nowadays, many legal concerns are also raised for collecting Third-party data.

Zero-party data overcomes these limitations by providing businesses with a direct way to collect first hand data from customers, and it is even much better information than First-party data. With zero-party data, businesses can proactively collect customer information with the customer’s explicit consent. This allows them to obtain exact and up-to-date information about their customers’ needs and preferences.

Zero-party data is an important tool for driving personalization because it allows businesses to segment customers based on their exact needs and preferences. By understanding what customers want and need, businesses can provide more individualized and targeted content, products, and services.

In addition to driving personalization, zero-party data can help businesses build strong customer trust and loyalty.

How can organizations use Zero-party data?

Organizations can use zero-party data to understand their customers better and create more personalized experiences for their ecommerce business. By collecting data directly from customers, organizations can learn about their preferences, needs, and desires. This information is used to improve products and services, tailor marketing messages, and provide a seamless customer experience.

Think Zero-party data as information gathered in one on one conversation where you get your customers/shoppers to share about their favorite colour, their skin allergies, what they love to eat, and anything that you want to know that can mutually benefit your business and the shoppers. 

Businesses that collect and use zero-party data can also create deeper relationships with their customers. By understanding what customers want and need, you can make your customers believe they are valued and thus build trust and loyalty. 

Customers are more likely to do business with companies that they feel understand them and meet their needs.

Zero-party data can also be used to help organizations reach out to new customers. By understanding current customers’ preferences, you can target similar individuals with tailored marketing campaigns. This helps to ensure that potential prospects are also more likely to engage with your products or services.

Overall, zero-party data provides a wealth of information that can be used to improve the shopping experience, build deeper relationships, and reach new markets.

How can consumers use zero-party data to their advantage?

In the digital age, data is power. Consumers generate it every time they go online, and companies are willing to pay top dollar to acquire this data. However, most consumers are unaware of the value of their data or how it’s being used. This is where zero-party data comes in.

Zero-party data is information that a consumer proactively shares with a company. This can be anything from preferences and demographics to purchase history and intent. It’s called “zero-party” because the consumer voluntarily gives this information without any prompts or incentives from the company.

The advantage of zero-party data is that it allows companies to build a complete profile of their customers. This helps them better understand customer needs and individualize their products and services according to their needs. In turn, this leads to building trust and a long-term relationship.

For consumers, the benefits of sharing zero-party data are twofold. First, they can be sure that their data will be used in a way that benefits them, rather than being sold to third-party data companies or used for marketing purposes without their consent. Second, the zero-party data is used to their advantage by proactively sharing information that will help companies provide better services and products.

Read how you can collect Zero-party data with foundation quiz.

How do businesses collect Zero-party data?

There are several ways through which companies acquire Zero-party data:

#1. Conversational pop-ups

A pop-up is shown to customers who have landed on your website. You can ask them direct questions and give them personalized product or service recommendations through this pop-up. You can also design your questions in a way that can segment the customer in a campaign funnel.

Read this case study of Amazing Cosmetics, how they engaged dropping-off visitors with pop-ups.

#2. Quizzes

You can collect Zero-party data by creating a quiz on your eCommerce website that asks customers their preferences and what they are looking for. This is especially useful for companies that sell products that have to be tailored for the customers, such as beauty products or clothing.


#3. Onboarding

Zero-party data collection can be as simple as another part of onboarding that comes with a subscription. You can ask for basic information such as name, address, email, demographic, etc… Still, you can also add questions to gain insight into the customer’s relationship with your products or similar products.

…in the end!

Zero-party data is an important tool that businesses can use to collect customer information. By collecting this data, businesses can better understand their customers and create more targeted marketing campaigns. Additionally, zero-party data can help businesses build trust with their customers and create lasting relationships. If you’re not already using zero-party data in your business, we encourage you to give it a try — you may be surprised at just how beneficial it can be.