Why Customer Centric Brands Are Leveraging Zero-Party Data

Personalization is critical in the digital age. Customers now expect companies to not only understand their broad needs but tailor experiences and shape interactions to reflect their deeper intentions and lifestyle. This level of personalization, however, is becoming more and more difficult to achieve as customers become increasingly skeptical of companies that pursue persistent targeting initiatives with third-party data like cookies. Now, to succeed in facilitating more personalized interactions, companies must find new ways to learn about their customers without sacrificing trust and transparency.

To drive personalized interactions with a more open approach, many companies are leveraging zero-party data; a term initially defined as data that is intentionally and proactively shared with a brand. It includes preference center data, individualized context, purchase intentions and ultimately identifies how the customer wants to be recognized by the brand.

What’s most unique about zero-party data, is that it can actually inform the customer experience. Through the use of customer surveys and quizzes, companies allow their customers to willingly state their preferences and goals before even beginning their journey with a brand. Vogue Business recently touched on the importance of zero-party data and its emergence as a modern customer experience tool that is currently being leveraged by innovative and customer-centric beauty brands.

Vogue Business points to brands like Atolla, a customizable skincare subscription that gives customers the opportunity to fill out in-depth surveys asking detailed questions about their skin type and condition before making a purchase. To gain an even more personalized formula, Atolla customers also receive at-home skin tests to further customize the type and quantity of ingredients used in the product. Additionally, the product itself is personalized, addressing the recipient by name with labels like “Serum Just for Vanessa”.

This level of heightened personalization is definitely exciting; but it’s not entirely new. The subscription economy placed an initial emphasis on tools like surveys and quizzes to understand baseline customer preferences. When setting up a Netflix or Hulu account customers are typically met with questions about their viewing and content preferences. Meal subscriptions like HelloFresh ask customers to specify their dietary restrictions and nutrition goals. But what’s interesting about this renewed emphasis on zero-party data, is its ability to impact the product itself.

Because the personalization is built into the product customers remain engaged throughout the purchasing process. They gain a sense of ownership over the outcome, and form a deeper relationship with the brand and product, which makes the entire process feel more collaborative.

While the beauty industry clearly benefits from a heightened level of personalization, more brands should be leveraging zero-party data to form more meaningful relationships with customers. By giving customers an open line of communication, companies gain access to a wealth of insights to improve and optimize interactions. When customers can actually identify their feedback and preferences reflected in the end product or service, they feel more invested and form a more meaningful attachment to the brand.

Additionally, as companies begin to collect more zero-party data, they can build out stronger customer profiles to ensure every customer’s history and preferences are accessible to agents when they seek out support. This gives agents a deeper understanding of the customers’ primary goals and allows them to provide more intentional support.

It also gives companies the opportunity to identify changes in customer behavior in real-time. If customers are consistently updating their preferences to tailor their own experience, companies can identify changes and successes instantly. Atolla’s CEO notes that the brand is using zero-party data to promote an accurate feedback loop. The company promotes consistent check-ins to ensure the products are effective and the customer’s needs are being consistently met. This level of consistent feedback allows companies to form an evolving picture of their customer and keeps insights accurate and up-to-date.

Ultimately, zero-party data gives companies access to more genuine and direct feedback that can stimulate more meaningful customer relationships. Customers benefit from the heightened personalization, and companies can promote long-term relationships through an emphasis on consistent innovation and improvement.