Most consumers are not always willing to share their information with companies. Marketers are therefore trying to collect more data to better understand their audience.
With data deprecation – such as Google’s removal of third-party cookies – marketers’ data sources dwindle. Yet one source of data has and will continue to remain supreme: customers. When marketing teams receive customer data, they can better understand the needs of their audience without infringing on people’s privacy. Enter zero-party data, a term coined by Forrester Research for data provided directly by customers.
“What really sets zero-party data apart is that it’s voluntary,” said Forrester analyst Stephanie Liu. “It’s data that a customer chooses to share because they like the brand or product, and get something in return.”
This type of data is unique from first-party and third-party cookies, which obtain data from Company or third-party websites. In Liu’s CX North America 2022 session, she went deeper into real-world zero-party data examples.
1. Yelp Highlights Customer Preferences
Personalization has become a more common marketing practice over time because it benefits CX and helps customers feel like an organization understands them. Yet personalization only works if CX teams collect customer data, which may make customers uncomfortable if they haven’t voluntarily provided the information.
Zero-party data can make personalization more efficient and won’t risk crossing a line with customers because they only provide the information they want to give. For example, Yelp’s app lets customers create a preference center, Liu said. Users can enter their dietary, lifestyle, and accessibility preferences, among others.
“Yelp has clearly done its research on how customers choose restaurants. It won’t treat your preferences as filters. It won’t hide restaurants that don’t meet all of your needs. Instead, in the results of research, it tells you what preferences each restaurant encounters,” Liu said.
To personalize recommendations, Yelp uses zero-party data to highlight restaurant attributes that match customer preferences so customers can draw their own conclusions.
2. Mecca prioritizes relevance over repetition
Repetitive emails are often a marketing team’s greatest asset and customers’ biggest complaint against businesses.
Stephanie LiuAnalyst, Forrester Research
Mecca, an Australian beauty retailer, has found a way to avoid those repetitive emails with zero-party data. During her session, Liu described the Makkah Mother’s Day gift finder quiz. At the end of the quiz, he asks what type of buyer the customer is – ranging from a beauty novice to a beauty lover.
“It helps Mecca segment you to understand the best way to communicate with you to be relevant and helpful but not boring. For example, if you know next to nothing about beauty…maybe you just need of an email twice a year,” Liu said. said. “Compared to someone who loves beauty but generally shops for themselves, it’s going to be a very, very different cadence.”
When customers tell the company what kind of buyer they are, marketing teams can adjust email frequency accordingly. They can send relevant emails with announcements or sales based on customer interest in the products. This approach can also help ensure a positive CX.
3. Mockingbird collects information over time
Marketing teams sometimes have to play the long game to get accurate data and avoid annoying consumers.
Liu said she experienced this example of zero-party data when she purchased strollers from Mockingbird. After entering her email address, the company asked for her baby’s due date. The frequency and content of Mockingbird emails changed as the due date approached. At first, the emails were less frequent and mostly featured positive customer reviews, Liu said. Later in the pregnancy, the emails became more frequent as the company knew it had to make a decision quickly and highlighted specific features and benefits of the strollers.
“It’s not something they could easily deduce… You can’t go to a data broker and buy a dataset that says women were expecting and due in six months,” Liu said. “They just asked… ‘How should we communicate with you in the most relevant way to where you are in your journey?'”
This method shows an understanding of individual customers, while the company gets relevant and timely information to help personalize emails and offer product recommendations.
4. Sephora explains personalized recommendations
The beauty industry is a zero-party data hub, as customers tend to buy products that match their skin tones, skincare concerns, and personal preferences. If beauty brands have loyalty programs like Sephora’s, they can dig deeper into that data.
Sephora’s loyalty program allows users to fill out a beauty profile with information about their skin, hair, eyes, and concerns or types of products they are interested in. With this data, Sephora can send personalized product recommendations to each customer. Yet it also goes deeper and explains why these products would work for customers based on their beauty profiles.
“When they make product recommendations in their emails, they tell you why. ‘Here’s an eyeshadow for your green eyes only. Here’s a foundation for your fair complexion, a moisturizer for your oily skin,'” Liu said. “It’s very transparent. ‘Here’s what you told us. Here’s how we use it.'”
This transparency can build trust between customers and brands. Plus, it gently notifies customers to update their information if it becomes outdated or inaccurate over time.
Key points to remember
Overall, zero-party data can help marketing teams highlight customer preferences and provide and explain relevant recommendations. As a long-term strategy, zero-party data can help marketers learn more about customers over time and build trust.
Zero-party data strategies also take time to develop. Getting this information from customers won’t happen overnight, and some customers may not want to share it. Marketing teams need to understand which customers are willing to share their data and how to reward them.
“Identify the data points you need to drive those business results and determine how knowing your customer better will benefit them. It can’t just be about the benefit to you. There has to be that reciprocity. .. this valuable exchange to thank them for sharing this data and encourage them to share more data in the future,” Liu said.