Customer data is gold. While it’s a valuable commodity in e-commerce, the manner in which it’s collected has been a serious concern among customers.
With privacy breaches and data leaks becoming common, mistrust from the public has only grown and become more widespread.
So, when Google announced its plans to phase out third-party cookies in 2020, e-commerce companies were compelled to find new ways to gather user data.
In a world that’s soon to be cookieless, companies must find new and innovative ways to gather information about their target markets.
While first-party data that’s gathered through cookies has been the norm, methods that enable zero-party data need to be prioritized and explored by forward-thinking companies.
Though first-party data has been around for some time, zero-party data is emerging as the newer, cooler kid on the block. And a profitable one at that.
Before we understand how each works, it’s essential to understand what they are and what they entail.
What Is Zero-Party Data?
Any data collected directly from the customer, voluntarily or proactively, is zero-party data. The term was first coined in 2018 by Forrester Research.
It is popularly considered an extension of explicit data because the customer explicitly shares it with the organization to help them deliver personalized experiences.
This type of data is generally collected with the promise of a reward such as a free e-book, webinar, discounts, and more.
What Is First-Party Data?
First-party data is unique information about the customer’s behavior.
It’s collected through the organization’s platforms, including its website, social media, and more. This information usually includes their locations, languages, preferences, the type of websites they visit, the items they are interested in, and more.
Code is placed on the organization’s website and analytic platforms are used to collect this data.
While they may sound like they’re doing the same thing, one key difference exists. It pertains to how data is collected.
With zero-party data, the customer and organization are in direct conversation with each other. First-party data, on the other hand, is collected via analytics and user activity.
What is Cookieless Marketing?
Cookieless marketing is the concept of targeting and tracking users for the purpose of delivering an effective marketing message without the use of cookies.
Cookieless marketing is becoming increasingly popular as the use of cookies declines.
It involves using a variety of approaches to target and tracks potential customers, including using technology such as machine learning and Artificial Intelligence (AI), tracking customer actions and behaviors, leveraging data obtained from third-party sources, and collecting data from connected devices.
Cookieless marketing can help e-commerce businesses create more effective marketing campaigns and gain deeper customer insights.
Importance of Zero- and First-Party Data to E-commerce Marketers
Since data is collected directly from customers, the quality and authenticity of the data are high. This is particularly useful for marketers who want to create highly personalized customer experiences based on market preferences, interests, demographics, and more.
This, in turn, helps boost user engagement, customer retention, and brand/platform affinity.
More notably, marketers can boost their outreach strategies with:
Enhanced Personalization
Since customer information is collected directly from them, there is little room for error.
E-commerce marketers can analyze available data and create personalized buying experiences for customers they actually want and value.
Moreover, customer touchpoints that actively solicit information from customers help them feel involved and heard.
Improved Targeting
Data from third-party companies is useful. But it’s also shared with thousands of other companies. Data from zero- and first-parties is exclusive and relevant to only that particular organization.
This means marketers don’t have to spend hours analyzing and contextualizing information from third-party data. Since they get to call the shots on the information that they collect, they can more accurately target their customers and reap profitable returns.
Greater Insight Into Customer Behavior
With advanced, first-hand access to customer data, gaining deeper insight into customer psychographics is remarkably easy.
Organizations can better understand their customers’ personalities, lifestyles, likes, dislikes, habits, behavioral patterns, and interests, which are effective in developing highly effective outreach strategies.
Increased Customer Loyalty
The goal of any marketing team is to cultivate customer loyalty. Earlier, organizations were forced to come up with semi-informed guesses in hopes that they would work.
Zero- and first-party data enables teams to analyze organization-unique data, create strategic, targeted campaigns and products that customers value immensely, and increase customer loyalty more effectively.
Learn how to increase customer loyalty for Shopify stores
Marketing Strategies Based on Zero- And First-Party Data
There is no IF question about implementing Zero and First Party Data marketing. The question is only WHEN will you be forced to have it implemented in order not to lose valuable data regarding your customers and visitors.
Here’s how you can create marketing strategies using zero- and first-party data:
How is data collected?
Zero-party data is collected directly from customers by the organization that will use it via strategically curated quizzes, conversational pop-ups, surveys, social media polls, contests, onboarding, and more.
Conversely, first-party data is based on users’ online activities and behaviors.
They are collected through website forms, newsletters and ebooks, social media and webpage analytics, and customer surveys. There is no direct interaction between the company that will use the data and the users they gather it from.
Zero-party data does not require analysis. First-party data is collected from online user behaviors and other analytical software and needs analysis to derive actionable insights.
Use Data to Design Segmentation Strategies
Once data is collected and analyzed, it is now time to create strategic audience segments. Based on these, marketers can develop buyer personas and build unique positioning strategies and strong outreach campaigns to engage each segment.
This enables enhanced customer experiences that drive sales and high return on investment (ROI).
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Personalize Your Marketing Strategies
E-commerce marketers often face a confusing paradox. On the one hand, customers expect personalized brand messages while being concerned about their privacy and how their data is collected. But they also expect uniquely crafted experiences at different stages of their buying journey.
Customers don’t mind organizations using data to create personalized experiences for them. According to a McKinsey report, 71% of customers expect companies to deliver personalized interactions.
But there’s a caveat. These experiences must always be based on data they have explicitly shared with the organization, not external sources.
Hence, personalization is vital. No customer wants to be treated like everyone else and companies are rapidly turning to data to tailor their outreach plans.
The McKinsey report also noted that companies that provided personalized experiences saw a 40% faster increase in ROI compared to those that did not deliver customized interactions.
Personalization is comprised of those “micro-moments” that brands create at different stages of the marketing funnel which are unique to that customer.
For instance, sending a discount coupon via email to prompt a potential buyer to check out items from an abandoned online cart. It could also mean sending a branded DIY video about a product they’ve been looking at for the past few days.
However, organizations must also be cautious when dealing with sensitive customer data. It should be collected efficiently, stored securely, used responsibly, and gathered with utmost transparency.
Automate Targeted Campaigns
Once data is collected, analyzed, and segmented, your marketing campaigns are ready to be distributed. But how? You cannot expect your marketing and sales team to send targeted campaigns manually. It’s time- and labor-intensive.
Plus, for real profit, you must think about scaling things up.
Automation has been a hot topic in marketing circles for a long time now and for good reason. Eighty percent of e-commerce marketers reported increased lead generation while 77% noted higher conversions.
Engaging your customers at different touchpoints in their buying journey has become easy, seamless, and error-free. There are emails, push notifications, live chats, and other channels that have or can be integrated with automation features.
Today’s automated marketing software is packed with dedicated templates that are highly customizable and can be seamlessly and accurately sent to specific market segments.
You can automatically send targeted campaigns to your market segments based on contextual needs.
Examples of these include warm welcome emails, reminder emails with incentives to encourage purchases and boost retention, follow-up emails for lead generation, feedback requests to understand the shopping quality experience, and more.
Automated software also provides real-time analytical insights. In an industry where agility is critical, marketers can leverage such information during important promotions and campaigns to boost optimization and scale performance.
Conclusion
Zero- and first-party data deliver one thing — organization-unique data that is considered more of a digital currency these days.
E-commerce marketers have acknowledged the importance of transparency and ethical data collection in a space where customers are increasingly concerned about how their data is collected and what it is used for.
Moreover, outreach plans need to be based on highly accurate data and savvy marketers are taking note of this. Fortunately, zero- and first-party data is proving far more helpful in creating innovative and engaging customer experiences based on this requirement.
Such data also lends several significant advantages to new-age marketers, such as enhancing trust and transparency, shifting control to customers, and letting them decide on the type of information they want to share.
Data is now far more accurate and authentic while enabling well-informed, effective marketing campaigns.
It is abundantly clear that a data-driven marketing approach is the way of the future. In a competitive space, it’s more than just numbers.
Generic marketing activities are a thing of the past. And marketers are compelled to go the extra mile to truly understand their customers — what they like and dislike and how customers across cultures vary in behavior and preferences.
As a result, data-driven marketing campaigns perform better and drive desired customer actions.
Lastly, in the age of agility, real-time data on customer behavior can help e-commerce marketers optimize their strategies to suit the needs of individual customers at any given time.
