What is Zero-Party Data?
Most of us have heard of third-party or first-party data. But what exactly is zero-party data? This invaluable resource is information that is explicitly shared by end users. It complements traditional structured data and helps companies around the world to create more hyper-personalized experiences. Marketing, customer service, and product development teams in particular can use this diverse data set to their advantage and provide greater value to the end user.
In this post, we’ll look at what exactly zero-party data is and the role it plays in creating a comprehensive Customer 360 view. We’ll then look at some scenarios in which you can collect zero-party data and give you tips on how to get started with your new data strategy. The latter is important to help you stay ahead in the evolving landscape of AI and customer engagement. Let’s dive in.
What is Zero-Party Data?
Simply put, zero-party data is typically unstructured information that is voluntarily and proactively shared by end users. This can be information from social media posts, surveys, customer reviews, preference settings, chatbot conversations, and user-generated content. It comes in many forms, such as text, video, and images.
Unlike implicit first-party data, zero-party data is not mediated by the company collecting the data. Companies that use this type of data therefore benefit from direct insights into the intentions, preferences, and needs of their customers. In combination with other first-party and third-party data sources, zero-party data enables the creation of a clearer customer view or Customer 360 in your data platform of choice.
Why is Zero-Party Data Important?
This unstructured data type is essential for businesses today to understand their customers, especially with the rise of AI. Traditionally, tools such as preference centers and surveys have collected this data, but they often fail to capture the true intent of users. GenAI has opened up new possibilities in sectors such as media, retail, healthcare, and finance by making it easier to detect explicit user intent. AI customer agents are transforming online search, browsing, and purchases. This change offers brands the opportunity to better understand their customers’ intentions and improve their personalization strategies.
In addition, the emergence of more affordable storage options for unstructured data in data lakes and lakehouses simplifies the management of these previously unwieldy data points. GenAI capabilities within lakehouses and warehouses now allow organizations to structure and operationalize this information in a similar way to how first and third-party data has been done over the past decade. As storage and modeling technologies become more accessible in the race to improve personalization, the real advantage will be in enriching customer data with zero party data. This approach is already being taken by some companies. Some examples in how companies are advancing their competitive advantage include:
- Offering hyper-personalized experiences
- Predicting customer intentions with greater accuracy
- Improving the efficiency of customer support
- Making informed product development decisions
As John Bourous, Senior Partner Marketing Manager at Snowplow, explains: “Zero-party data is incredibly valuable because we can now learn the intention of a user directly.” This direct insight allows companies to ask questions like “What are you doing here?” and respond accordingly. Now companies are learning to do this at scale to improve customer satisfaction, increase efficiency, and ultimately drive higher profits in an increasingly competitive market.
5 Real Examples of Zero-Party Data Sources
There are a number of sources that companies can take advantage of. Below we have listed the five most common sources:
Search & Discovery
Search queries on your website or mobile app provide information about users’ purchasing intentions. They are a form of zero-party data that provide a view into what your customers are looking for, so you can customize your offering and improve the user experience. You can use search queries to find out which products and services are trending. You can use them to identify common pain points in the user journey. They can also reveal potential gaps in your product range and serve as a basis for merchandising decisions.
AI Chatbots
AI chatbot conversations are a treasure trove of zero-party data. Customers are using these channels more than ever, sharing their questions, problems, preferences, and satisfaction levels. Chatbot interactions capture your customer’s voice directly in a way that historical purchase or browsing data cannot. They provide context and nuance that structured data simply can’t capture. Advanced companies are using this information to improve their chatbot responses, increase conversion rates, identify common customer issues, and even support product development.
Social Media Monitoring
Social media is also a powerful source of unstructured data. From mentions to comments to shares, social platforms capture customer sentiment and trends in real time. In addition, channels such as TikTok, Snap and Instagram allow users to share non-text-based content in the form of videos and images that sometimes speak louder than words. What makes this type of data particularly useful is that it’s often unsolicited and reflects real customer opinions. You can use social media data to measure the perception of your brand, identify influencers, and respond quickly to new issues or opportunities.
Customer Support Interactions
Your customer support channels contain valuable unstructured data about customer issues and experiences that directly impact customer loyalty and retention. From emails and chat logs through to call logs, B2B and B2C brands can benefit from this rich source of data. This data is one of the best places for you to understand customer issues, problems with products or services, and the effectiveness of your support processes. Product and support teams in particular can use this information to improve their products, streamline support processes, and increase overall customer satisfaction.
User-Generated Content
Similar to social media, user-generated content such as forum posts, reviews, and blog comments provide authentic, unsolicited customer feedback. However, this type of data provides more detailed information than social media about customer experiences, preferences, and suggestions for improvement. It’s a great way to accurately measure trends in customer sentiment, gather ideas for product improvements, and even discover new use cases for your products or services.
And the list doesn’t end there. The wealth of zero-party data can seem overwhelming. But if you use it effectively and combine it with other data sources, you can completely revolutionize your customer experience.
When you combine zero-party data with structured data, you can create unparalleled personalized interactions and make more accurate predictions and recommendations. But it’s important that you don’t tackle everything at once. Start small. Focus on the areas with the biggest impact. And gradually expand the use of zero party data within your data and personalization strategy.
The future belongs to the companies that can apply this multimodal approach to building an advanced Customer 360 strategy. And we at Snowplow look forward to supporting you on this journey.
Start Your Zero-Party Data Journey
Snowplow’s customer data infrastructure (CDI) has always excelled at capturing zero-party data events. From Zendesk support tickets to full application chat logs, our collection capabilities incorporate multiple data sources, while focusing on data quality and richness.
But now, with the proliferation and accessibility of LLMs in your data platform, we can make sense of these historically cluttered data signals and unlock the true value of this information. With these tools, we can turn unstructured data into structured, analyzable insights and improve business operations.
Think of a customer conversation with an AI chatbot. Now it’s possible to turn these insights into actionable data: tracking the effectiveness of recommendations, measuring positive response rates, and linking conversations directly to sales. With Snowplow’s AI Agent Event Collection and Analytics Data App, powered by Snowflake Cortex AI, you can do just that.
You no longer have to just gather small bits of zero-party data. You can understand it, learn from it, and use it at scale to drive your business forward. Our AI Agent Event Collection and Analytics App also uses zero-party data to measure the impact of your GenAI investments on customer behavior and improve personalization initiatives.
Investing in an AI customer agent and want to unlock the value of zero-party data? Then request a demo of our AI Agent Event Collection and Analytics Data App today.