Transitioning to Zero Party Data

With consumer privacy concerns on the rise and data regulations tightening, marketers are realizing the limitations of third party data sources. However, shifting to first party data collected directly from customers presents challenges on its own. An alternative gaining traction is zero party data – the data customers actively choose to share about themselves. Embracing zero party data strategies can help brands access valuable insights while respecting customers’ privacy and control over their information.

Traditionally, marketers have relied heavily on third party data purchased from data brokers and partners. This includes demographic and behavioral data used to segment audiences and target ads. However, concerns around data ethics, security breaches and increased regulations mean third data is becoming a less viable option. While first party data collected directly from customers can fill some gaps, acquiring valuable insights from customers remains difficult.

This is where zero party data comes in.

Rather than passively collecting customer data, marketers can implement ways for customers to actively provide information they are comfortable sharing. Customers maintain full ownership and control over their zero party data, choosing what to disclose and when. Brands only gain access to data when customers decide to give permission.

For instance, Smartsheet implemented a “Data Donation” feature that allows customers to opt-in and share usage analytics to improve the product. In turn, donating customers receive early access to new features as a reward. Likewise, brands can implement preference centers where customers select the types of communications and offers they are willing to receive. Those who provide more details are then eligible for higher-value rewards and exclusives.

Beyond preference centers,

zero party data strategies also include organizing customer communities and forums where individuals can choose to share experiences and advice. Brands gain insights from these interactions while demonstrating a commitment to transparency and customer empowerment.

Overall, transitioning from third party to zero data requires cultural and strategic shifts within marketing organizations. Teams need to shed notions of “owning” customer data and instead focus on how to actively earn customer trust so they feel comfortable sharing information. Brands must provide genuine value in exchange for zero party data while being transparent around how data will be used.

While acquiring zero party data often requires more effort compared to purchasing data, the benefits include more accurate insights aligned to customer interests. Customers also feel a stronger sense of brand loyalty and goodwill knowing they retain full data sovereignty. Though a long-term play, transitioning to zero party data now will position brands for both data ethics and marketing success in the years ahead.

In conclusion, as third party data sources become less viable, zero party data strategies offer a privacy-centric alternative for marketers. By creating opportunities for customers to actively share information on their terms, brands can access valuable insights that also strengthen relationships. Embracing zero party data requires cultural shifts within organizations but lays the foundation for sustainable digital marketing in a world where consumer data control is paramount.