As compliances to ask for permissions and to use any kind of customer data increase, enterprises have introduced the term ‘Zero Party Data’ which is not to be confused with the first-party data.
Understanding Zero Party Data (ZPD) lies within two words – Privacy and value. According to a Forrester report, ZPD is data that a customer has intentionally and proactively shared with a brand. This can include purchase intentions, preference center data, how the individual wants the brand to recognize them and even personal context. It is different from first-party data (FPD), in many ways. Firstly brands own FPD, but not ZPD. With ZPD, consumers grant a brand the right to use the data for the value exchange or for a particular intent.
Unlike other forms of data, ZPD should be considered ‘fluid’ and can never be sold without consent. According to experts, first-party data is rich with implied interest and behaviors, while zero-party provides explicit preferences and interest, which is used to improve the customer experience and product value.
First-party data is collected through interactions with customers, while consumers give the marketers zero-party data in exchange for benefits from the firm. Experts believe that brands historically might have considered the self-reported data to be the ‘first party,’ but the compliances and consumer expectations forced the need for this new term and the way of treating this type of personal information. ZPD is data that consumers are ‘willing’ to share with brands directly.
ZPD is asking people what they want from a brand, correctly using it for that person, and not inferring it for a broader population. According to experts, ZPD reflects the fact that people want more control over their data and they are willing to share it for a purpose which can be used for better personalization or even a reward. ZPD is a crafty way to put data privacy and explicit opt-in under the spotlight.
First-party data is talked about a lot, but currently, with a focus on consumer data, it has to become explicit opt-in data. The industry now calls it ZPD. The way experts choose to explain is, when a client or a customer provides an email address, they sign up for value exchange. The brand or the website has an offer that they want during that particular point in time and customers are happy to exchange contact details, but it does not mean that they will always be interested in being contacted. The idea of ZDP is that there has to be fluidity to it and the client has to keep telling the brand that they are interested in.
According to Forrester, having preference centers is a great way to capture the ZPD. It also helps to build trust as it gives customers control and choice over the way companies contact them and share personal information.
