Zero-Party Data: The Future of Personalized Brand Interactions

The cookie jar will soon be empty. Or at least most third-party cookies will be gone, and then where will brand interactions be? Zero-party data is the answer.

It’s true. Apple and Mozilla have already eliminated those tasty crumbs of data that identify users’ computers when they’re online. They’re also at the core of how the digital advertising world functions. Google, with its Chrome browser, plans to follow suit by the end of 2022—and won’t create alternate consumer tracking identifiers once this phase out is complete.

What does this mean for the future of brand interactions, especially for those consumers in market for your products or services? Fortunately, first-party cookies aren’t going away; brands can still gather information from visitors to their own websites.

But the elimination of third-party cookies is a big deal. That’s why it’s more important than ever to leverage customer relationship management (CRM) data, especially first- and zero-party data.

First-party data is information required to receive a product or service, e.g., a customer’s name or address, or information gathered as part of normal customer or prospect interactions, such as purchase or web-browsing information.

Zero-party data, by contrast, is optional information customers choose to share with you. It may be product related, like asking for clothing sizes to offer the right items. Zero-party data includes preferences, like asking for favorite wines so you can offer deals on the ones your customer is bound to like. And zero-party data also refers to supplemental profile data, such as a customer’s planned purchases.

The key to grasping the difference between first- and zero-party data is this: First-party data is generally required information that customers supply, while zero-party data is optional information shoppers offer to improve their experiences.

And because third-party data will soon be a thing of the past, gathering first- and zero-party data is imperative for improving and personalizing all brand interactions. You know how to collect first-party data. But how should your brand better engage with customers using zero-party data? Here are 12 ways to capture and use zero-party data, plus some actions to avoid:

Begin with zero-party data at its simplest

Consider requesting a customer’s name and email address in exchange for a first-time discount or a subscription to brand communications. Most brands already do this, but it’s a good way to illustrate zero-party data. Additionally, many brands allow customers to determine how often they receive communications and the types of content they’re sent (i.e., weekly deals, annual member-only sales, product articles, etc.).

Ask for customer preferences

Start with the ones your brand can consistently take action on. For example, an airline might request a seat preference (window or aisle) and/or a special meal request (Kosher, vegetarian or gluten free). Similarly, a hotel may ask for an upper or lower floor choice or a pillow preference (feather, down or hypoallergenic). Whatever preferences you ask about, be sure to deliver on those requests regularly.

Don’t overwhelm your customers

You don’t want to ask so many questions that they stop answering and never submit their information. Just make a few queries that will provide insights on which you can deliver, and fill in more over time.

Apply zero-party data to brand segmentation

Early on in a customer relationship, a brand knows very little about an individual. Requesting information upfront can help your brand fit that customer into one of your marketing segments and/or journeys much earlier in the relationship.

Make clear asking for a preference doesn’t guarantee fulfillment

An airline can’t guarantee a particular seat and a hotel can’t always provide the preferred floor. Likewise, your brand should ensure that customers understand any preference shared is one you’ll do your best to accommodate but can’t always guarantee.

Don’t ignore provided preferences

If a customer tells you she’s in the market for a truck, she doesn’t want to receive emails touting the benefits of the latest sedan. Ensure that your brand communications across all channels (direct mail, email, social media, SMS, etc.), align with a customer’s preferences.

Find out their promotional preferences

While we’d all love to get 100% off coupons, perhaps your brand will discover that certain clients prefer last-minute deals, while others like weekly offers, and still others want to hear from your brand only once a month.

Take your cue from subscription services

While companies like Stitch Fix, Fabletics and Gwynnie Bee are completely subscription based, others such as The Laundress and Lush invite customers to subscribe to regularly purchased items. Not only is this convenient for them but it boosts your brand’s bottom line and helps ensure customers stick with your products.

Let customers add favorite orders to your app

Dunkin’ Donuts and Starbucks, for example, provide this functionality. Again, this is a customer-centric and convenient benefit for regulars so attached to your brand that they’ve downloaded your app and actually use it.

Gamify customer preferences with quizzes

For example, beauty brands often provide helpful insights into customers’ hair and/or skin types (i.e., oily, dry or combination) in exchange for their answers. You can also then provide helpful product recommendations in your brand interactions.

Encourage customers to share their likes

Apple Music and Spotify, for example, ask members to share favorite genres and performers, which then can be used to make initial recommendations.

Refresh your customer preferences

Just as your products and services change, so too do a customer’s likes. Maybe a traveler wasn’t interested in far-flung destinations when her kids were young. But now that they’ve flown the coop, she wants to travel halfway around the world to check Bali off her bucket list. Ask for preferences periodically, noting that your brand wants to ensure messages are serving them well.

No doubt the elimination of third-party cookies will have far-reaching repercussions; it will also necessitate the increased use and value of zero- and first-party data. By leveraging zero-party data, you’ll give your brand a leg up on engaging customers with personalized communications.

Charlie Heitzig is Vice President of the Data Intelligence Practice at The Lacek Group