Three Reasons Why Zero-Party Data is Marketing’s Next Big Thing
With the recent passing of Europe’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA), tech companies will find it increasingly difficult to collect data about their target audience. In the face of this changing legislative climate, how can Marketing best approach data collection?
Zero-party data, a type of data collection where users voluntarily share their personal information with companies, could offer a solution. Because zero-party data relies on building trust with consumers instead of a passive collection of user behavior, data is collected and shared with much greater transparency.
In its current state, zero-party data is largely theoretical as it has yet to be fully adopted by the Marketing industry. But there are several ways that companies are beginning to bring theory into practice: Quizzes, contests, or opt-in checkboxes to enter information.
With zero-party data primed ready to be unleashed, here are three reasons why it’s about to change the way we approach Marketing.
Builds Trust With the Consumers
Let’s face it: Nobody automatically gives up their data to brands with no questions asked. Third-party data collection typically involves gathering information without the users’ consent, ultimately resulting in a lack of trust between the consumer and the company. Then, when massive data breaches occur, consumers lose all faith in the brand.
To grow trust, there needs to be a clear exchange of value between data given and the experience received. In order to be most mutually beneficial, the consumer needs to know that what they are giving up will be put to good use, in a way that benefits them in some way. Zero-party data collection addresses this by making sure that the consumer sees value in providing this information. In fact, 79% of consumers would share their data if they could see a clear benefit to them.
Once brands gain consumers’ trust, they can leverage it to improve their product. For example, a company can include a survey on their landing page that allows users to suggest improvements. Because users see the obvious advantage of an improved product, they are much more likely to give valuable information. Zero-party data is beneficial not only for companies but for consumers as well – largely due to the mutual trust gained in the process.
One more thing to note: Traditional Marketing strategies such as email campaigns, advertising campaigns, or website data collection don’t work well in collecting zero-party data. When the goal is building trust, Interactive Marketing such as quizzes are the best means to fully engage with zero-party data.
Creates a Culture of Transparency
Another benefit of zero-party data is the public relations boost it can give your company. After the many data breaches of the past decade, this approach gives consumers back their data privacy while holding companies accountable for their actions.
Zero-party data moves towards a more responsible type of data collection where everyone is in the loop throughout the entire process. Customers don’t like it when they feel big brands have easy access to their information. Because zero-party data is completely opt-in, brands have to make sure that they keep a high level of quality, transparency, and accuracy.
Building relationships with customers is great for the long term of any business. Increased transparency and the ability to provide clear value encourages more opt-ins from willing customers.
The 2010s were a “wild west” when it came to data collection, with consumers willing to give and companies all too eager to take. In the 2020s, brands will be forced to change by providing more transparency and data security when it comes to data collection – zero-party data provides all of this and more.
Read More: Top Tips for Marketers in 2020
Gives You Better Customer Profiling and Targeting
Originating from transparency issues and the resulting increases in regulatory measures, zero-party data is also perfect for unlocking greater consumer profiling and targeting. Using this kind of data collection, companies are able to improve their customer acquisition through recommendations, services, and offers.
In fact, zero-party data has the ability to make targeting much more precise. Because the consumer is able to control just how much data they give up, the data is much more likely to be accurate. It makes sense when you think about it: Asking nicely will almost always achieve better results in all walks of life – Marketing is no exception.
So while companies may be collecting less data, they’re typically collecting much more accurate data. No longer will customers fill out their information as firstname.lastname@example.org simply to continue an experience – zero-party data ensures that the data collected is much more reliable.
When it comes to the long-term sustainability of any business, building relationships with customers is essential. Transparency, trust, and value build relationships with customers and encourage them to opt-in to providing data. For 2020, it’s high time to progress past passive data collection: Instead, actively ask your customers. Your business – and your customers! – will thank you for it.