With the death of third-party cookies and more regulations around customer privacy, more and more eCommerce companies are shifting their focus on first and zero-party data. This type of data is totally under their control and brings more meaningful interactions with their businesses.
The “cookiepocalypse” is definitely moving the world forward to a future where first and zero-party data become a competitive advantage for customer-centric companies.
We’ve started our transitions to the era of consent, as marketing experts emphasize:
“The cost for acquisition is very likely to rise as first-party data becomes more valuable. Google, Facebook, Apple, and the other big tech giants have more of it than you do, so with that oligopoly comes huge pricing power.” – Jason Greenwood, eCommerce, Digital and Retail Specialist
“We’ve been relying on 3rd party data for too long. It made us stay in our comfort zone and killed the former “big ideas” behind marketing and advertising campaigns.” – Eden Bidani, Conversion copywriter, Growth mentor, Secret anthropologist
“Lazy marketers will attempt to game the system by doing more bait-and-switch type things to capture first-party data. But I’m optimistic there will be a large influx in focus on UX and delivering something WORTH my personal data.” – Shiva Manjunath, CRO Marketing Manager at Gartner
Let’s see what types of data you are already collecting, what alternatives you have for collecting first and zero-party data, and how using this type of data benefits your company.
What type of data does your business collect for marketing purposes?
There are four types of data most eCommerce businesses collect, and you probably check them all too:
- Third-party data is data collected from various websites and platforms and aggregated by a third-data provider that doesn’t have a direct relationship with your customers.
- Second-party data is data your purchase from another company as part of a collaboration that gives you access to their first-party data.
- First-party data is data you collect from your users and customers through direct interaction with your brand on your owned channels.
- Zero-party data is data that users and customers proactively share with your brand, allowing you to capture more of their preferences.
Zero and first-party data helps you achieve what every eCommerce store needs in a highly competitive environment: personalized experiences through valuable content and relevant product recommendations adapted to the lead’s or customer’s stage, needs, and preferences.
How do you collect zero-party data?
To start collecting more zero-party data, you have to think about interactive micro-experiences on your channels. When you create an interactive quiz or an engaging personality test, your users and customers are more likely to share the information with your brand proactively.
No matter what alternative you choose, make sure the reason why they engage with your data-collecting content is clearly stated.
You can use quizzes in multiple ways. More and more eCommerce stores use shoppable quizzes to find precisely what people are looking for and what they prefer. Their clear answers eliminate guessing, so brands can generate tailored recommendations and even allow users to add the products to the cart instantly.
Quizzes are also a fun way to test your customers’ knowledge on various topics linked to what your brand values, promotes, and sells. Quizzes help you evaluate their awareness and suggest relevant educational content that leads people to informed decisions.
For example, a store that sells dietary supplements can test the customer’s knowledge about these products by asking a series of questions about nutrition, health, and supplements.
The customer’s results reveal the stage they are in their journey, so the brand can make personalized recommendations like a guide for people who are new to supplements or a product selection for those who got a maximum score.
The products and services that customers buy from your brand can be a way of expressing their personality. Starting from the personality profiles your brand can address, you can build a series of questions that keeps the customers engaged and curious about their result. In the end, you can offer a detailed description of their personality and recommendations based on it.
A store that sells perfumes can create a personality test that helps customers find the perfect fragrance from a new collection. The test can include a series of lifestyle questions that capture people’s likes and dislikes. On the result page, the brand can reveal the personality and a custom selection of perfumes.
Surveys are a great way to capture complex information and customer feedback. It helps you learn more about a person’s needs and expectations before and after the purchase. When potential customers enter your store, you can ask about their goals, then give them solutions tailored to their answers. After their order is delivered and they get to try your products or services, you can ask them about their experience.
A store that sells sportswear can create a survey to find what type of sport and clothing new visitors are looking for, then make a personalized recommendation based on their answer. A few days after the order is delivered, the store can send a follow-up survey to evaluate if they are satisfied with the products they purchased based on the brand’s recommendation.
Polls are single-question surveys and a quick way to gather feedback from visitors and customers on various topics, triggered at defined moments, on specific pages. You can use the results as insights for future customer experience optimizations.
A store that struggles with many abandoned carts can create a simple poll asking, “What stopped you from buying today?” and offering multiple predefined answers to capture objections. Additionally, there could be a field where respondents can elaborate on their choice. The store can use the answers in designing solutions that reduce cart abandonment.
How do you collect first-party data?
First-party data is data you have been collecting without giving it too much thought. It’s data that occurs naturally through interactions with your users and customers. Because of the death of third-party cookies, stores started to focus more and more on 1st-party data, which became a valuable resource for their customized campaigns.
Adding tracking pixels to your website helps you collect first-party data about user and customer behavior. Once you enable tracking, you start collecting information by assigning a unique ID for each user or customer interaction. This allows you to track their behavior from the moment they entered the website for the first time to when they become a customer and beyond.
Companies collect first-party data when users and customers create a personal profile on the brands’ application. The data you collect from your app becomes valuable when you can measure user and customers behavior and sync it with the other data you have for each contact. Apps are also great channels to gather more zero-party data through engaging surveys or polls.
Customer Relationship Management System
Your Customer Relationship Management (CRM) platform helps you gather numerous customer data from their interactions with your store. It’s that type of data generated automatically through interactions and includes contact information like name or email, lead source, and stage, customer type, purchase history, email, or social media engagement.
What benefits do you get from using zero and first-party data?
You get the most out of your zero and first-party data when you centralize them all in a customer data platform. After collecting the data, you need to analyze it and gather customer insights that will help you create personalized experiences.
1. Increased trust and transparency
Being compliant with privacy regulations is a big win for your company and your customers. First and zero-party data is data your users and customers share with you through direct interaction, so this forces you to be transparent about why you collect data and always ask for permission to gather data.
2. More accurate and better quality data
Collecting data directly from your customers helps you keep the data clean and updated. You can gather more relevant data through interactive micro-experiences, leading to more accurate details about your users and customers, allowing you to build personalized experiences.
3. Easy to work with
Having a zero and first-party data strategy makes it easier for your digital marketing team to work with all the data you collect from your users and customers. Data can be collected with a standardized strategy in mind but bought to life through interactive experiences for your users. Integrating existing customer data to optimize various marketing strategies becomes more accessible when all this data is centralized in one data management platform.
4. Effective marketing campaigns
The main reason why you collect first and zero-party data is to create personalized user and customer experiences on multiple channels. The information you obtain allows you to create dynamic and timely content, make custom product recommendations and keep people engaged with tailored experiences.
5. Customized onboarding
Customer acquisition can be challenging and expensive, so you can use valuable zero and first-party data to create personalized onboarding programs for different types of customers. You can collect zero-party data to learn why they bought the product and adapt the onboarding depending on why they buy. We all know how important first impressions are, so you want to adjust your messages to meet customer expectations.
6. Retaining more profitable and loyal customers
Having more accurate data helps you create better audience segments and nurture each group according to the particularities in the customer profile. Collecting more zero and first-party data and creating audiences based on behavioral data helps you improve contextual targeting. As a result, you create more effective campaigns for each segment you want to increase and each customer you wish to retain in the long term.
7. Reduced costs compared to third-party data
Investing in solutions for collecting, storing, and processing first and zero-party data is more profitable than purchasing third-party data, which isn’t as accurate and reliable as the data you get directly from your customers. It is also an ROI booster because you’re using data to drive more customized experiences that are more likely to generate revenue.
8. Using data your competitors can’t access
Shifting your attention from third-party data to zero and first-party data means that you stop using the same data your competitors probably rely on too. The information you capture directly from your users and customers is only yours, and you can use it wisely to set your brand apart from the competition.
The end of the third-party era, a.k.a. the cookieless world, brings many changes and will be really challenging for businesses that will try to use hacks to adapt to the new reality. When it comes to collecting and using first and zero-party, consent is key before thinking of strategies for personalized experiences.
The alternatives you are using to collect customer data become micro-experiences. Interactivity will increase engagement and lead to more quality data. Make the best out of your first-party and zero-party magnets.
Read more about customer data on our blog:
- Marketing experts talking about the last cookie crumbs in the digital advertising ecosystem;
- Twenty-one experts share their scenarios for this new era of consent we’re all about to enter;
- Preparing now for Apple’s iOS15 update and learning how your eCommerce business can survive the end of 3rd party data;
- An in-depth view of how Reveal uses your Shopify store’s first-party data to optimize Customer Lifetime Value and helps your eCommerce grow.