Zero-party and first-party data: everything you need to know
Party and data, two words that conjure up very different vibes. Zero-party data and first-party data are both terms we hear a lot, and rightly so. We’re going to explore both types, what they are, how you can gather them, and when they should be used in your email marketing.
First of all let’s remind ourselves of the importance of data as a whole.
Why is data important?
Data as a concept can feel daunting, overwhelming, or you may feel right at home with a spreadsheet of information – well done to you if so. Ultimately, data is the truth. It’s information. Data allows you to know who you’re talking to, what they like, and what they respond to. Data tells you if your work is effective, or if you need to change some things.
For the super nosy, or ‘naturally inquisitive’ among us, data is actually the fun part. Ever got a thrill from looking at an email campaign’s click/heat map? Peeking into the mind of your customers to see what intrigued them is exciting. Or perhaps that’s just me.
Regardless, data is so important because humans are unpredictable. Everyone has different tastes, preferences, and behaviors. Data lets you see what’s happening, and adapt based on that to get real results. Convinced you yet? Let’s dig into what exactly constitutes zero-party and first-party data.
So, what actually is first-party data?
First-party data, also known as behavioral data, is information that a company directly collects via its own channels and sources. These channels include mobile apps, websites, social media, SMS, email, and more. An example of this is order history, browsing data, email click data, and so on. It’s information a brand collects naturally as a customer interacts with it, rather than explicitly asks for.
What can I use first-party data for?
First-party data is likely to be highly relevant to your brand due to the nature of collection. It’s data related to your product and web experience. Knowing that ‘Customer A’ has a tendency to browse a certain category, and purchase only when a discount code is offered, allows you to create a targeted campaign that will appeal to them and likely generate a conversion. Dotdigital’s eRFM technology helps you identify and segment your customers in this way and work to spot new opportunities.
First-party data is great as it lets you see what’s working and what’s not. This can be on a more detailed, individual level such as the example above, as well as general things like subject line learnings. For example, if 60% of your database respond better to subject lines with emojis in, using emojis is the better option moving forward. Of course you can also then create two segments and send each group their preferred subject line style.
First-party data should inform your decisions around general strategy, in particular it will inform segmentation and personalization to create highly relevant and effective campaigns.
What do I need to be aware of with first-party data?
We’ve established that data is great, it lets you know so much about your customer. But before you go off creating super relevant campaigns chock-full of personalization, remember your customers’ point of view. Utilizing this data to target people perfectly sounds great, but there is an art of subtlety needed too.
People are, understandably, wary of companies having lots of data on them. This is due to companies suffering data breaches or even selling their customers’ data on to third-parties (third-party data). You need to demonstrate to your customers that you value their data, and that you’re treating it carefully. This is a big part of responsible marketing, something which is no longer a trend, but a necessity if you want happy customers. Customers’ desire for tighter data practices is what drove Apple’s Mail Privacy Protection, and Google’s promise to end cookies by the end of 2024.
You also don’t want to be seen as creepy. Ever had an advert appear for something that you were just talking about? It can be unnerving. The odds are you have actually searched the product at some point, or you fit a ‘highly likely to be interested’ profile based on something else you’ve bought previously. (Or that our tech really is listening to us, but that’s a conversation for a different day). As always, you need to be mindful of the customer’s experience. You want to make your customers feel valued and understood, not feel like they’re being cyber stalked.
Got it. So what is zero-party data?
Zero-party data is any data shared willingly by contacts, such as via a survey, a sign-up form, or an account profile. Collecting zero-party data eliminates the “creepy factor” customers can often experience with a brand.
Trust is key for collecting this data, as discussed consumers are increasingly protective of their data. Another principle of responsible marketing is to ensure you have a clear data policy that customers can access any time you’re asking them for information. It’s also a good idea not to ask for data you don’t actually need, it shows you’re respecting their data autonomy and aren’t reckless or frivolous with their information.
Although consumers are wary of handing out their data, they are willing to do so. For a customer, it must be an exchange; where they get a reward. Our customer loyalty report found that the top motivators across all age groups were to claim the signup discount/offer (35%), to hear about future promos (33%), and to become a part of the loyalty program (30%). Notably, 41% Of Gen Z (16–24) also chose curated content as a top motivator for signing up to a brand’s newsletter. If a customer shares their data with you, reward them by using it to make their experience even better. This means don’t ask a customer what they’re interested in, their preferred communication channels, their first name even, and then fail to use it. It’s only going to make you seem insincere, and possibly raise questions regarding what you are actually doing with that data.
What can I use zero-party data for?
Similar to first-party data, zero-party data should be used to better the customer experience. If someone tells you they prefer SMS, and don’t want to hear about Mother’s Day, respect that. It results in a happier customer who’s less likely to unsubscribe or flag you as spam, and it also stops you wasting time and money on campaigns you know they’re not going to be interested in.
Customer experience is a huge part of deciding repeat custom, especially in a market where consumer budgets are smaller, each transaction needs to deliver. That includes the whole customer lifestyle from initial sales email to post-purchase communications. Ensure you’re using the preferences and data available to you to deliver an experience that makes the customer feel valued and want to come back for more.
What do I need to be aware of with zero-party data?
Unlike first-party data, you don’t need to worry about seeming creepy as customers have consciously given you this information. One thing to consider though, is that not everyone knows what they want. A customer may say they’re not interested in a certain category, but their browsing and order history could say different. Which leads us to…
How zero-party and first-party data can work together
Zero- and first-party data should work together to paint a full picture of your customer. There are strengths and weaknesses to both, let’s look at an example.
‘Customer A’ makes their first ever order with your brand. It’s a jumper from your menswear section. First-party data is then telling you this is likely a male customer.
As part of their purchase, they sign up to your newsletter to get the 10% off code you’re promoting to new customers – value-exchange in action. The customer then gets a welcome email pointing them towards your preference center. It’s here that they provide some personal information and preferences (zero-party data), and you discover they are in fact female. Perhaps they are buying a gift for a male friend meaning this is a less frequent purchase, or she prefers the cut of a male garment and will be interested in more menswear – we won’t know that much detail yet.
Over time, first-party data such as browsing and purchase behavior will continue to build the customer profile, as will any future zero-party data from things like surveys that you choose to send.
The point is that customers can be complicated, and not everything is as linear as you might think. A combination of zero- and first-party creates a reliable and accurate picture of your customers. Taking information from both sides of the customer journey and combining it to create a strategy that works both in theory and in practice, enables you to create highly-relevant campaigns, resulting in better performing marketing.