Amidst privacy concerns, rising ad costs, and changing customer needs, retailers are pivoting to a zero-party data strategy.
Instead of paying for third-party data or analysing retrospective first-party data, customers voluntarily provide zero-party data in key moments of engagement with your brand.
It’s a much better experience for them and provides highly valuable data to you. Win-win.
But, what holds brands back from leveraging zero-party data is a lack of a coordinated zero-party data strategy to guide choosing what data to collect, how to collect it, and how to leverage it.
Fortunately, developing a zero-party data strategy isn’t as complicated as it sounds.
Let’s get into it.
What is a Zero-Party Data Strategy?
A zero-party data strategy is a plan to generate, leverage, and govern the collection and application of zero-party data. It starts by identifying sources of zero-party data and then details how to gather and leverage it.
With a zero-party data strategy, you can:
- Futureproof your marketing strategy in the face of data and tech privacy changes.
- Boost your marketing KPIs and your business ROI.
- Build strong customer relationships.
- Create highly relevant and personal customer experiences.
So far, so good. But how do brands get started?
Establishing a Zero-Data Strategy Framework
Setting a framework for your zero-party data strategy – including how it’s generated, leveraged, and governed – allows you to set clear and accurate goals for your business. And more importantly, help you achieve them.
Here is a 5-step zero-party data strategy framework:
1. Develop a clear plan:
The best place to start is to develop a clear plan on how you will collect and use zero-party data. Start with what you will do with the data, how you plan to use it, and what difference you believe it will make. For instance, how do you expect it to impact Click Through Rate or Average Order Values?
Then think about who else within the business would benefit from the data – it’s likely that it can support product development and even overall business strategy development around audiences, markets and trends.
From here, you can then start to develop a strategy for collecting data so that you can cover the needs of multiple departments… While also focusing on how you can deliver the value-adding experience that customers crave.
Need inspiration? Take a look at this blog for examples of how leading brands like Nike and Vitality Health use zero-party data.
2. Establish what customer insight you need:
The next step is to hone in on the key data points you need to hit both your marketing strategy and business goals.
Let’s say, for example, that you aim to drive loyalty and retain your most valuable customers. With that vision in mind, what data points would be the most useful to know?
Think about prioritising that data and segmenting / branching the data. For instance, consider whether different groups may need different questions. You’ll also want to consider the freshness of the data and how often you’d need to capture it to achieve these goals. Once a year? Every 6 months?
It’s also vital to consider complexities, such as compliance with privacy laws and the impact on consumer trust. This can help you decide which data to prioritise.
3. Lean on technology to collect zero-party data:
Once you’ve determined which zero-party data is the most meaningful to collect, next up? Determining how you’re going to collect and store zero-party data.
So, first thing: data storage. Where will you store the data and can you then use it for the ideas suggested in step one? There are solutions that enable marketers to keep clear of this. But, we think it is worth considering the architecture of systems and Single Customer Views. Because whilst some of this may sound daunting, you don’t have to solve everything at once. However, having an understanding of this will help you take incremental small steps that get you to a better and better place.
And in terms of getting engagements, here’s the part you can’t forget: make the value exchange clear. Ensure that the payoff your customers and prospects get from sharing insights with you is clear and on par with the value they give to you.
With a platform like 3radical Voco as your audience engagement and earned data provider, you’ll know that customers are providing zero-party data in a way that is both compliant and in line with your customer’s privacy needs.
4. Work with accredited specialists:
Sound too much?
For many brands, building a zero-party data machine is too much of a resource-intense process. And once you’ve built a solid zero-party data strategy, it’s not a set-and-done task because of the need to regularly run campaigns to keep data fresh – and to store it safely.
It’s an ongoing task that involves defining targets, tracking results, and optimising as you go along. And that’s why they outsource it to a specialist.
But not any specialist. If you’re considering zero-party data, which we highly advocate if you’re serious about retaining customers and acquiring new ones, then look for specialists who can offer best-in-class solutions and talent to help you prepare for a privacy-first world – while helping you boost business performance too.
5. Ensure data compliance:
Lastly, it is vitally important to exceed the minimum privacy requirements to meet changing customer needs and build trust.
Consent management is also a key consideration here. If your customers’ experience your brand through a website or app, incorporating consent into the user experience should be a top priority.
Another key way to maintain consumer trust is through robust data governance. By managing data properly and implementing data integrity processes, you can improve data accuracy, timeliness, and useability.
This is something that accredited specialists can help with too. It’s a much more cost-efficient and safe way to run zero-party data strategies.
Leveraging Zero-Party Data
Of course, once you have a framework in place to collect and manage zero-party data, the next step is how to leverage this data as discussed in step one.
Here are a few of the ways 3radical clients maximise zero-party data:
Using the Data for Targeted Marketing
Unlike third-party data, when you capture zero-party data, you capture an individual’s motivations, purchase intentions, desires, needs, values, and preferences – as they are – right now.
This human data is like gold dust and few brands are capturing it right now, so there’s a huge opportunity for competitive advantage.
Not only does it make marketing campaigns resonate better and get cut-through, it also optimises ROI on marketing efforts. How? Because you’ll know which multi-channel marketing strategies to use to reach your audience across mobile, email, social media platforms, and more.
Plus, because it’s first-party data (and not second-party data collected elsewhere), you’ve got customer consent. They are willing to share it and trust the brand to use it for the right reasons: delivering personalised experiences.
Using the Data to Personalise Experiences
Every brand dreams of truly knowing their customer – and not at a segmented audience level.
The best news is that now, with zero-party data, this is possible. Through zero-party data collection, you can build a picture of individual customer behaviour and spot personalization opportunities in real-time.
This is key! Because, of course, it means you can react to needs right now and tailor marketing campaigns so that they better resonate – rather than relying on previous purchase history.
The end result? A better customer experience, a boost to engagement, customer loyalty, and optimised conversions – even with something as simple as through speeding up A/B testing.
It’s a win-win situation.
Analysing the Data to Improve Products and Services
But, beyond this, zero-party data collection captures customer feedback to help spot trends and identify ways to improve or develop new product and service ideas.
It can even be used pre-product/service launch, allowing marketing teams to test different options and identify which resonate best with customers.
Pro tip: Start with smaller use cases. This can give you quick wins, cross-team learnings, and a clear sense of progress.
As the digital landscape continues to evolve, the value of zero-party data will become increasingly more important for businesses to understand and leverage.
Getting the right technology, tools, and processes in place is not as easy as it seems. The good news? 3radical can help.
3radical makes it easy to set-up your first zero-party data campaign – from there you can design more personalised customer journeys, enhance your targeting efforts and conversion rates.
Say hello to closer relationships with customers, better conversion rates, and higher customer lifetime values.
Get started now. Book a demo.