Zero and First Party Data Are the Gifts That Keep on Giving

There is a lot of discussion lately around different types of customer data.  Even a few years ago, it wasn’t overly common to hear about the different categories of data (third party, first party) … and now zero party data has entered the chat.  You know customer data is popular when it’s included in a Tom Fishburne cartoon!

Why Are Zero Party Data and First Party Data So Prevalent Now? 

The data landscape is shifting. Third party cookies are on the way out and companies have already started to rely less on this data source. And data privacy regulations are growing more stringent every day, requiring better data collection, consent, and protection for all industries, not just highly regulated ones.  Zero and first party data both come directly from consumers and ultimately can provide richer insights for organizations. 

So What Are the Different Types of Customer Data? 

Zero party data is data that is actively and willingly provided by consumers. This type of data is often collected through specific opt-in programs or events, such as surveys or polls, contests, and loyalty programs. Unlike first party and third party data, which are collected passively or without the consumer’s knowledge, zero party data is obtained directly from the consumer themselves.

First party data is data that is collected by a business directly from their customers. It is often in the form of web activity and can include information such as purchase history, email addresses, and demographic information. First party data is often collected through customer relationship management (CRM) systems and is used by businesses to personalize their products and marketing efforts.

Second party data is data that is collected by one business and shared with another business.  This can include information such as aggregated customer data, insights from market research, and anonymous user data. Second party data is often shared through partnerships and collaborations between businesses and is used to gain a broader understanding of customer behavior and preferences. A common example is customer data that a partner shares with you from an event. 

Third party data is data that is collected by a business or organization that is not directly related to the consumer. This can include information such as browsing history, location data, and online behavior. Third party data is often collected through cookies and tracking technologies and is used by businesses to target advertising and personalize content.  Third party data has been relied on historically and is becoming less popular due to how it’s collected and the lack of accuracy.

What are Examples of Zero Party Data?

The idea of zero party data is great.  But what are some examples that are being implemented today?

One example of a company collecting zero party data is a clothing retailer that offers a loyalty program. Through the loyalty program, customers can earn points for purchasing items and can provide feedback on their experiences with the retailer’s products. This feedback, along with information on the products that customers purchase and their purchase preferences, can be used by the retailer to improve their products and marketing efforts.

Another example of zero party data is a restaurant that asks customers to fill out a survey after their meal. The survey can include questions about the customer’s experience at the restaurant, including the food and service, as well as their preferences for future visits. This information can be used by the restaurant to make improvements and provide a better experience for their customers.

Overall, zero party data is a valuable tool for businesses to better understand and serve their customers. By collecting this type of data directly from consumers through opt-in programs and events, businesses can gain valuable insights into the preferences and behaviors of their target audience.

What Should Companies Be Doing?

The amount of data available to your organization will only continue to expand, as will the privacy landscape and customer demands for personalization. If you’ve already started working on a data first strategy, great, and keep at it. You will want to regularly audit your plan for areas of improvement. If you haven’t created a plan for strategic use of customer data, there is no time like the present to start. The longer you wait, the farther behind you will be from your competition.

The most important step for your company to take is to create (or update) a strategic data governance plan: 

1. Assess your company’s customer touchpoints and determine what data types are available for collection
2. Select which data you actually need to collect, prioritizing zero and first party data 
3. Create a plan for how you’re going to collect customer in a compliant manner, reducing dependence on third party data
4. Map out how you’ll use the data to create compelling customer experiences that maintain consent

Tealium works with companies around the world in every industry to support a first party data strategy that also integrates seamlessly with all data types. Our customer success teams are world class and are known for helping our customers create the best possible approach to utilizing customer data. If you’re interested in learning more about how Tealium can support your organization, schedule a free demo today.

You can also check out these amazing additional resources to get started on a winning data strategy:

• eBook “In Data We Trust: Your Guide For Establishing Customer Trust Through Privacy”
• eBook “Customer Data Integration 101: How to Integrate Data from Different Sources Into Your CDP”
• Webinar “It’s Time to Change Your Data Strategy”