Zero-Party Data: Personalization and Privacy Can Coexist

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Zero-party data, the personal information that customers intentionally and proactively share with companies, can be a boon for marketers if they leverage it correctly. But if they don’t follow best practices, marketers can also risk driving customers away.

Zero-party data can include a wide assortment of information, including contact preferences, purchase intentions, personal context, and even naming preferences (whether a customer prefers to be called Robert, Bob, or Bobby, for example). It differs from first-party data in that companies own first-party data but not zero-party data. Because of that, zero-party data should never be sold without explicit permission from the customer, experts agree.

Consumers grant companies the right to use their zero-party data for specific purposes or value exchanges.

“Zero-party data shouldn’t be conflated with first-party data,” says Wilson Raj, global director of customer intelligence at SAS, a provider of business analytics and intelligence. “There can be value in both, but clearly zero-party data is superior.

Zero-party data is particularly valuable to marketers because customers providing the information have indicated that they actively want to communicate and are likely to engage when targeted.

“If you treat it properly, zero-party data collection will help build a trusting relationship with your consumers,” according to a recent report from Forrester Research, which is largely credited with coining the zero-party data concept. “Ultimately, zero-party data can reduce marketing waste of a brand and improve the lives of its customers—a win-win situation for everyone involved.”

Zero-party data is also higher quality than customer information gathered by other means, according to Petros Xanthopoulos, assistant professor of decision and information sciences at Stetson University in central Florida. “It’s much better than just relying on cookies on a company’s website and better than relying on just algorithms. There is no incentive for the customer to provide the organization with wrong data.”

Yet there’s no guarantee that zero-party data is completely accurate either. According to Forrester, “asking for too much information at one time can be overwhelming and may lead your customers to provide false information just to get through the process.”


“The critical thing in terms of capturing data like this is that there has to be a reason or value to the customer for providing it,” says Charlie Heitzig, vice president of the data intelligence practice at the Lacek Group, a marketing and advertising consultancy in Minneapolis.

People who don’t complete profiles accurately might not see the value in doing so. Heitzig, therefore, recommends conducting two types of surveys to ensure that customers complete their profiles truthfully. Companies can conduct customer preference surveys in exchange for explicit value (e.g., points, discounts, etc.) and customer service follow-up surveys (e.g., “How was your experience”) in exchange for the satisfaction in knowing that the input will help the business be more effective in serving customer needs now and in the future.

Airlines and hotels have been particularly effective in obtaining zero-party data, according to Heitzig. With airlines, the implied value is that they will provide the customer with a preferred seat. With hotels, the implied value can be a preferred room location, pillow type, mattress type, bed type, etc.

Starwood Hotels & Resorts took it a step further, letting customers design their own room card. Heitzig says the program lets customers tell the company, part of Marriott International, something about them without filling out a survey. As part of the value exchange, hotel guests got customized cards with pictures of wine, a beach, food, a spa, etc.

Retailer Ulta Beauty enables customers to include plenty of personal information in their profiles with quizzes about their skin care and other topics to improve service in stores and online. The implied value is that the company will help the customer be more beautiful and (maybe) healthier, Heitzig said.

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