Use Cases for Zero-party Data
Data quality, product relevancy, privacy, and better audience relationships.
In the previous post, I described the subtypes of zero-party data and today, I’m covering its four primary use cases.
This is an excerpt from a guide originally published here →
Since zero-party data is shared by audiences directly or explicitly, it’s deemed to be more accurate than first-party data that’s collected indirectly or implicitly. That said, collecting accurate data is no good if not put to use across the audience journey.
Let’s explore the most important use cases for zero-party data beyond personalization. I don’t like to consider personalization to be a use case for any specific type of data since data of every type enables some form of personalization. And when it comes to zero-party data, it enables several personalization benefits that I’ll cover in the next issue.
It’s time to explore the four main use cases of zero-party data, let’s dive in.
Improve data quality
Unlike first-party data, zero-party data is shared by the end user directly and is therefore more accurate. At the same time though, zero-party data is more difficult to collect and store in a structured manner.
Moreover, zero-party data is not a replacement for first-party data — it’s complementary.
Zero-party data helps improve the overall quality — accuracy, freshness, reliability, and completeness of a brand’s audience data.
A simple example is deriving a website visitor’s location implicitly via the IP address for, say, language personalization. If a brand takes this data for granted and doesn’t explicitly ask the visitor for their language preference, they risk losing that visitor completely.
And when that happens, the brand will end up attributing that loss to some other factor, while maintaining inaccurate data about the user because they didn’t bother asking them for their language preference in the first place.
While this sounds like a no-brainer, Facebook, which is known for its sophisticated data practices, is guilty of this — it assumes that everybody speaks and reads their regional language in a country with 22 major languages.
The same is also true for professional info acquired from an enrichment vendor — the data is often outdated and not asking the user explicitly where they work and what their role is can be such a missed opportunity for B2B brands.
Understand product relevancy
Product here is an all-encompassing term to describe B2B and B2C products and services, including newsletters and other information products.
Today, it’s not so hard to get someone to give away their email address in exchange for a freebie like a template or an ebook. However, it is foolhardy to assume that the individual is actually interested in your product just because they’re interested in your content.
Irrespective of whether one sells a productized service, a premium newsletter, or enterprise software, one has to find out who is a prospective buyer and who’s never going to be one (but might still be a valuable contact).
So, what is the best way to find out, you ask?
You ask!
Is there a better way than asking your audiences directly whether or not they’re interested in a particular product, which products are they most likely to buy, and what features are they likely to use or not use and why? I certainly don’t know if there’s a better way but if you do, I’d love to know.
Upon asking, brands can not only deliver better recommendations and offers, but also use the data to inform product development efforts (B2B) and optimize inventory (B2C).
I won’t talk about the software companies that built seemingly brilliant features that their customers never used. I will, however, mention that Calendly is one company that does a fantastic job at building what their customers really need.
Adhere to privacy
It’s mind-boggling that with such punitive privacy regulations as the GDPR, so many brands choose to not invest enough efforts to make sure they don’t slip up and violate privacy laws.
In fact, I maintain a list of brands, including some of the most established names in tech, that are in violation by sending emails that one hasn’t explicitly opted in for.
The list also includes companies where demand gen, product marketing, and sales run concurrent email campaigns targeting every email that enters their respective systems without a clue about whether or not the individual is a prospective customer.
I don’t even find it surprising anymore — I have myself been on teams where hitting internal KPIs and fulfilling a personal whim are prioritized over improving the end user experience and adhering to privacy laws. It’s unfortunate.
For companies that are serious about complying with regulations while also offering a superior audience experience, an important first step is to let audiences explicitly specify the types of emails and notifications they’d like to receive and easily opt out of the ones they’re not interested in — while also making sure that all communication tools used across the organization are kept in sync with that preference data.
And this should be non-negotiable for companies that wish to build a brand that people trust and want to hear from.
Build better relationships with your audiences
The first step in building better relationships is knowing your audiences — understanding their needs and workflows, respecting their priorities and preferences, as well as empathizing with their constraints and limitations.
I know that’s a lot but in order to stand out from the crowd, brands have to completely rethink how they build and manage relationships with their audiences.
Knowing why someone shared their email address with your brand, for instance, can unlock opportunities to find out why that individual came in the first place, where they came from, and what is it that they expect from you in exchange for their email.
This information is sufficient to figure out which audience that individual belongs to (better segmentation), how they first learned about your brand (better attribution), how to engage with them going forward (better engagement), and how to fulfill their needs (better retention).
B2B brands, in particular, deal with multiple audiences, and understanding the needs and preferences of each of those audiences is key to building strong relationships with them.
Good relationships with prospects, partners, and advocates serve as the foundation brands need to build thriving communities.
Summary and what’s next
Beyond the obvious use case of personalization, zero-party data results in better data quality, better products, better privacy practices, and most importantly, better relationships with one’s audiences.
In the next part of this series, I’ve covered the personalization benefits of zero-party data, including some non-obvious ones, check it out!
