Join us for this Ecommerce Exposed episode as we dig into the good, the bad and the downright ugly of Black Friday 2023! Register now

Unlock the power of personalization by collecting zero-party data

Collecting zero-party data is becoming increasingly important for ecommerce brands to optimize the customer experience and create more personalized interactions. Zero-party data is non-transactional, voluntary customer data that helps brands better understand their customers’ preferences, motivations, and needs. 

This information can be used to personalize everything from emails and SMS to website pages, which helps to reduce customer churn, improve inventory management and forecasting, and create a loyalty program that keeps customers returning. 

By collecting this data, brands gain invaluable insight into their consumers’ values, desires and expectations, allowing them to give customers what they want before they know they want it. On top of this, using zero-party data allows ecommerce businesses to build trust with their customers by being transparent about how they use the collected information. It also helps them show customers that they value them as individuals and are trying to provide relevant product offerings tailored specifically for each individual. 

In this post, we’ll go over why zero-party data is crucial to your ecommerce business, and why you need  to start collecting zero-party data right now. 

What is Zero-Party Data?

Zero-party data is a type of customer data that consumers provide proactively. It’s information that customers choose to share voluntarily with companies and organizations to receive personalized experiences, products, or services. 

Zero-party data can include purchase preferences, personal interests, dietary needs, and lifestyle choices. This kind of data allows companies to build long-term customer relationships and create tailored experiences for them.

Companies must be transparent about how the information will be used and stored before they can collect it from customers. Additionally, companies must ensure they are using secure methods for storing zero-party data to protect the privacy of their customers. Collecting zero-party data can help businesses better understand their target audiences, develop new product offerings and increase sales conversions.

How Zero-Party Data differs from other data

Zero-party data differs from first-party, second-party, and third-party data in that it is explicitly obtained from the user rather than passively observed or collected from external sources.

First-party data is information collected directly from consumers through direct interactions with brands. This can take the form of website visits or surveys taken on a brand’s website. With first-party data, companies have full control over their ability to collect and store customer information while also having ownership over its use. 

Second-party data is when companies partner to share access to customer profiles and analytics to gain insights into their audience’s behavior and trends. This type of partnership gives both companies instant access to valuable consumer insights that they may not have been able to obtain independently. Second-party data also offers companies the opportunity to expand their reach beyond their existing customers by getting access to new potential customers within other businesses’ databases. 

Third-party data refers to consumer data obtained through indirect means, such as through third-party websites or vendors who specialize in collecting consumer behavior insights for marketing purposes. This type of data needs to be more accurate due to its indirect nature and lack of direct contact with customers. It’s often difficult for businesses to validate its accuracy or relevancy for marketing decisions, making it less reliable than zero-party and first-party data sources. 

Zero-party data stands out amongst other forms of consumer data because it allows brands to gain access to direct insights into their customer’s wants and needs more effectively than any other method available today. It also helps companies ensure that users’ privacy is better protected since no personally identifiable information (PII) needs to be exchanged during interaction with the brand. All collected data remains anonymous, adding an extra layer of security around sensitive customer information.

Why you need Zero-Party Data for your ecommerce brand

In the age of online shopping, customers increasingly care about their privacy, and as an ecommerce brand, you need to ensure that their data is safe and secure. Zero-party data helps you meet this goal by allowing your customers to provide explicit, purposeful data to inform interactions and personalize experiences. With ZPD, customers have more control over their data than ever before and can be confident that it is used responsibly. This builds trust between you and your customers, which is essential for fostering relationships in ecommerce.

Using ZPD also offers your brand a wealth of information on customer preferences that can be used to offer more tailored experiences across multiple channels. From email campaigns to website activity tracking, ZPD allows you to identify customers’ needs and interests more accurately – something that traditional methods or first-party data simply cannot do. With this data, you can craft highly personalized communications that resonate with your customers, increasing engagement levels and ultimately leading to higher conversions. 

On top of all these benefits, ZPD complies with the latest regulations, such as GDPR or CCPA. As such, it helps protect your business from potential lawsuits or other legal issues related to privacy management. Your customers know that their data is treated properly and securely managed — a peace of mind they are likely willing to pay for with increased loyalty towards your brand over competitors who might not have the same level of proactive privacy protection in place. Ultimately, using zero-party data gives you access to valuable insights about customer behavior and provides reassurance for both parties involved in any transaction.

How to collect Zero-Party Data 

Utilizing pop-ups is an effective way to collect zero-party data for your ecommerce business. Pop-ups allow you to signpost which programs customers should sign up for or prompt customers to take a quiz to learn more about their preferences. They also give you the opportunity to incentivize customers with loyalty points and exclusive rewards when they sign up for a loyalty program. Additionally, you can use pop-ups on social media channels to encourage customers to create an account and share their preferences with you. 

Quizzes are an excellent way to engage consumers in learning more about products, services and offers tailored specifically for them. This allows you to better understand what motivates customers’ purchase decisions – from preferred prices and product features, to preferred payment methods and delivery options – giving you the ability to make informed decisions based on actual customer preferences instead of assumptions or guesswork. 

You can also use incentives such as loyalty points or exclusive rewards to encourage customers to share zero-party data by signing up for a loyalty program or creating an account.

This helps build trust with existing customers and encourages new visitors who may not have considered purchasing from your ecommerce business before. 

Furthermore, collecting this type of data helps you gain deeper insights into how different generations respond differently towards certain messages, offers, or promotions so that you can tailor content accordingly to maximize engagement and conversion rates.

How Zero-Party Data boosts acquisition, retention, and loyalty

Zero-party data can be effectively utilized to significantly boost customer acquisition, retention, and loyalty. This direct consumer engagement allows companies to build stronger relationships with their consumers through personalization. 

When utilizing zero-party data to acquire new customers, companies can capitalize on consumers’ stated preferences and interests to provide them with tailored content that resonates with them personally. By leveraging this direct consumer engagement, companies can create highly targeted campaigns that will increase conversions and reduce customer acquisition costs. 

Once acquired, companies are able to use zero-party data to improve customer retention rates by sending personalized messages based on each individual’s stated interests to keep them engaged over time. Companies also have the ability to gain better insights into customers purchasing behaviors, which allows them to predict future buying trends as well as develop strategies for when and how promotional discounts should be implemented. 

Finally, companies can create loyalty programs tailored to each individual’s stated preferences by using zero-party data. This allows consumers to feel like they are getting rewarded for their loyalty in a way that works for them, instead of feeling forced or obligated into participating or redeeming rewards that don’t suit their particular needs or interests. 

These kinds of personalized loyalty programs will lead customers back into the sales funnel faster by offering promotions tailored directly towards their buying patterns, which will lead to improved bottom line performance for the company over time. 

Overall, utilizing zero-party data provides companies with an invaluable tool for boosting customer acquisition, retention, and loyalty while simultaneously providing customers with personalized experiences that they value greatly. By capitalizing on this direct form of consumer engagement, companies can create loyal relationships between themselves and their customers while increasing brand recognition and trust in the process.

Examples of Zero-Party Data in action

Seeing is believing. Here are some examples of how brands leverage zero-party data.

Astrid & Miyu

Astrid & Miyu uses ZPD by collecting birthday data to reward customers with points on their birthday as part of their loyalty program.

astrid & miyu zero-party data

Face the Future

Face the Future collects information about their customers’ skin type to provide personalized recommendations.

face the future zero-party data

Baked In

Baked In collects data about their customers’ pets and offers personalized rewards for their loyalty program.

baked in zero-party data

How LoyaltyLion helps brands collect Zero-Party Data 

Drive more repeat purchases

LoyaltyLion helps ecommerce brands grow by allowing them to easily create personalized loyalty programs with zero-party data. With LoyaltyLion, marketers can customize the program to their particular brand, including setting up rewards, defining points tiers, offering special bonuses, and more. By creating an engaging loyalty program that encourages repeat purchases and engagement, brands can increase customer lifetime value and drive more sales. 

Create personalized loyalty programs

LoyaltyLion helps foster a deeper connection between customers and their brand. LoyaltyLion’s points system allows your brand to reward customers for sharing zero-party data. For example, if customers fill out quizzes, they can be rewarded with loyalty points. 

LoyaltyLion’s features incentivize customers who actively engage with the loyalty program by awarding them bonus points or exclusive rewards when they achieve certain milestones. This keeps customers motivated and engaged while encouraging them to shop more frequently with your brand. 

Powerful analytics

LoyaltyLion’s powerful analytics allow marketers to track customer data and identify purchase trends to gain valuable insights into what drives customers to purchase products from their brand. By combining this data with the zero-party data collected from customers, brands can further improve personalization to increase conversion rates and repeat purchases.

Ready to get started? Book a demo with a member of our sales team today. Or, visit the LoyaltyLion Academy to become the go-to loyalty expert in your business.

About the author

Georgie Walsh

Georgie is the Content Marketing Manager at LoyaltyLion. Georgie has spent most of her 6+ years marketing in B2B companies, and has developed a huge passion for bringing B2B voices alive through engaging copy and memorable storytelling.