Get Acquainted with Zero-Party Data

Digital marketers want to collect a certain amount of personal information from their target consumers to build personalized campaigns that will increase the chance of success in a competitive and noisy advertising environment, but the concept of collecting customer data tends to come with a sense of skepticism or annoyance for shoppers.

Beyond the average consumer’s hesitancy to share personal information, the cannabis world faces even more marketing roadblocks. Regional marketing regulations are often restrictive and confusing—and the online sphere can be even more complicated to navigate. However, that hasn’t stopped marketers from finding methods to connect with their target audience, and collecting zero-party data might be one of the best ways to help brands accomplish their challenging goals.

What is zero-party data?

While third-party data is pulled from public records and first-party data from a user’s clicks, searches, and purchase history, zero-party data requires action on the customer’s part: an action that feels conducive to personalized experience and is more likely to result in customer loyalty.

With zero-party data, customers intentionally offer information that helps platforms understand who they’re catering to and allows them to build reliable customer profiles.

“Ultimately with zero-party data, brands can deliver a far better experience—deeper personalization and more relevant content—all while building trust. That trust is the underlying element to all of this,” said Wendell Lansford, co-founder and chief executive officer at Wyng.

Zero-party data vs first-party data

First-party data currently reigns as the most popular marketing tool when it comes to shaping the customer experience. But as marketing strategy has evolved, first-party insights on their own are beginning to pale in comparison to zero-party data.

“First-party data is opaque and somewhat stale,” said Lansford. “Zero-party data is knowingly and intentionally self-reported by a consumer to a brand, which gives much more insight into interests. Brands don’t have to guess. Consumers are telling them what they like or dislike, and they expect that data to be used for their own benefit.”

While zero-party data seems to come out on top of first-party in terms of details, it’s becoming increasingly clear that it isn’t better to utilize one over the other. Instead, the two data sets work best when used hand-in-hand.

“Brands are shifting from third-party in favor of zero- and first-party data,” said Lansford. “Most companies are still capturing first-party data, but will be more likely to use it in concert with zero-party data. That provides the most accurate, up-to-date picture of the consumer, and that combination can be used to really strengthen relationships.”

Essentially, brands will be at their strongest when they use one data set to inform the other. For example: let’s say you’re a new customer at Warby Parker and you just purchased your first pair of eyeglasses. The purchase itself allowed the brand to collect your name, social media account, or email address, and a quick post-purchase communication through one of those channels might be a great opportunity for Warby Parker to ask you, “How did you find out about us?”

This is a prime example of zero-party data collecting—and on the other side of the inquiry, companies can use the response to learn more about first-party data like understanding the correlation between the increased volume of Ohioans visiting your platform and a flyer that was posted about your company’s services in a popular Dayton coffee shop.

“As a company, we’ve been focusing on first-party data,” said Victoria Matiouchina, vice president of customer experience and insights at Collette. “But the ‘why’ is the hardest data to get—knowing what kind of customer is landing on our site and figuring out how to help them wherever they are in the journey.”

First-party data offers companies some pretty solid “whats,” especially in regard to understanding customer demographic and purchase behavior. But those statistics can fall flat when the brands don’t understand the purpose or reasoning behind the data. Without the whole story, brands are always at a much higher risk of unwittingly getting rid of their hottest ticket: the main driver of people to your platform.

“The only way to have loyalty and retention is to gain trust with people. Trust is the way to the heart—zero-party data allows you to not just buy people’s data, but to also have a relationship with them that lasts,” said Matiouchina.

Other types of customer data

There are three other datasets companies can utilize: third-party, second-party, and first-party. But for the most part, third- and first-party have been the most popular for companies interested in collecting behavioral data.

Third-party data

Third-party data is the easiest to glean but is likely to tell you the least about the user. This type of purchasable data includes anything that is public record, including demographic information like age or gender, general audience behavior, or job industries.

First-party data

First-party data is a little more actionable. This type of data will tell you about your website’s visitor activity: what they clicked on, signed up for, or what sort of products they purchased.

Second-party data

Second-party data is just first-party data you didn’t really have to work to collect. Instead, the data is purchased from another company that sources it on your behalf.

How to collect zero-party data

Zero-party data collection can look like sending out a quiz that allows users to detail their purchase intentions for finer-tuned product recommendations (like Prose’s hair quiz), inquiring about interests for personalized content (like Netflix’s thumbs-up or thumbs-down buttons), or sending out post-purchase customer service surveys with some sort of incentive to encourage responses. You may also consider offering a product finder quiz on your site, or a questionnaire focused on pop culture that can help you understand your customer’s interests better.

How cannabis brands are utilizing zero-party data

Whatever the approach, a zero-party data strategy is one that feels most like a win-win for platforms and users. This can be especially helpful in the cannabis space, where product recommendations tend to come in the form of blanket statements that include buzzwords like “anti-insomnia” or “terpene content.”

“There’s AI built into a lot of platforms, and they’ll give you predictability analytics, risk of customer loss, etc.,” said Caroline Fontein, director of marketing at The Artist Tree. “You can gain a lot from those insights, but I think you can create a much more customized experience when you have people voluntarily giving you that information—even asking a user how often they want to receive texts, or what their notification preferences are. It’s just an overall enhanced experience.”

Fontein sees zero-party data as a mutually-beneficial way to figure out who The Artist Tree’s audience is, and an easy opportunity to align the brand more closely with what its consumers are interested in seeing.

“We want to ensure people have easier access to products they love,” said Fontein. “We’re working on launching an app and a new rewards program soon, and zero-party data will be easily implemented there. We can ask people to set preferences, tell us about products they like, and give us feedback on fun cultural preferences, like music or TV shows. It’s easy to send discount emails, but it’s fun to make those emails something people can really relate to and resonate with.”