What is Zero-/First-Party Data and Why it's Important

For a long time, companies could gather data on consumers through the use of cookies. This was something that users consented to, as a way of personalizing preferences. But the winds of change are blowing, with major tech players signaling an end to support for third-party cookies.

As such, the pressure will increasingly be on businesses to collect first-party data or zero-party data from users. First-party data refers to data collected from users in the process of using a service and interacting with them as part of it. By contrast, zero-party data refers to information that is volunteered by users themselves.

The difference is a key one. The more details that a business can gather on a customer, the better —from the business’s perspective. In this sense, businesses will want not only first-party data, but zero-party data.

However, the question is whether customers themselves will voluntarily provide first-party or zero-party data. Customers may be conscious of privacy concerns, or otherwise hesitant to reveal more about themselves because they are afraid of scams or phishing. In this sense, businesses also have a responsibility to manage customers’ data securely and responsibly —a quick glance at the news and one sees that scandals abound with businesses inadvertently leaking data that their customers thought was private.

Cultivating Customer Loyalty Through Tailored Recommendations

Loyalty platforms, however, are one important way to cultivate ties with customers where they may be willing to provide this. Customers may feel that they are getting something back for the data that they provide, such as if this allows for better, more custom, and tailored recommendations. If anything, with the vastness of the Internet, customers may hope for more specific recommendations, and to have a closer relationship with what may otherwise be an anonymized product or service.

That is, one builds a relationship with one’s customers, where they come to understand that they identify with your product, and that your product and what it stands for is not simply out to exploit them, but which values the relationship. If so, they are more likely to provide data.

Unlocking Customer Insights Through Survey-Driven Loyalty Programs

Survey platforms may provide a way of developing loyalty programs in a way that customers voluntarily provide data. That is, through surveys, customers will provide information about themselves in a way that allows you to better understand them as individuals or in terms of the demographics your customers belong to. By partnering with an online survey platform, your membership service will receive a number of survey projects from the platform. The more your members participate in surveys, the more they can earn points/incentives, which will enhance your members’ motivation and reduce their retention rate. This can also provide a new revenue stream for your business, in cultivating a new membership base, who will provide data while also becoming loyal customers.

There is, after all, no running any kind of successful business if it is unable to understand its customers' desires and needs. Even as large and as iconic a company as McDonald’s has embraced loyalty programs as a way to strengthen ties with customers, and your business should do the same. Surveys are one important way to strengthen that tie and get to know customers better.

To learn more about how you can monetize your loyalty program, get in touch with our consultants today!