Zero-Party Data – What you need to know and why SMS are helpful when collecting it

3 years ago

How to successfully use SMS to collect zero-party data

It is no secret: successful marketing and positive customer relationships are built on reliable information about your customers. When it comes to how companies get that customer data, there have been several discussions over the years, but none of them have been as intense as the one about privacy.

In this discussion about data protection and the collection of customer data, there is not only frequent talk of third-party cookies and third-party data, but also, more recently, of a move toward zero-party data. But what does all this mean anyway?

In this post, we’d like to briefly explain the important terms and then explain why zero-party data is so very valuable to businesses and how you can use SMS to collect zero-party data.

What is the discussion about in general?
What are cookies?
A word on third-party cookies
What is third, second, and first-party data?
What does the elimination of third-party cookies mean for businesses?
What is zero-party data?
Why is zero-party data so valuable?
How can you use SMS to collect zero-party data?
Collecting zero-party data – Our examples
Conclusion – Should you use SMS to collect zero-party data?

What is the discussion about in general?

The elimination of third-party cookies and thus a change for companies: They’ll have to somehow replace data provided by third-party vendors in some other way. Even though Google just announced at the end of June 2021 that Chrome will still use advertising cookies until 2023 after all, forecasts predict that companies will increasingly focus on zero-party data in the future.

What are cookies?

Cookies are small text files that are stored in the browser. They allow users more comfort when visiting a website, for example by saving user names or the contents of the shopping cart. However, cookies are also used for tracking purposes. In other words, they may store detailed information about users’ surfing behavior. This information can be used to create data sets that collect users’ personal preferences. The data collected can then be used by companies to draw conclusions about visitors to their website. They then usually use this information to implement personalized marketing campaigns.

A word on third-party cookies

Third-party cookies are not set by the website operator. They are generated, for example, by advertisements or tracking pixels. As users visit different pages with the same browser, this cookie recognizes users on different pages and thus creates a profile of the users, which is where the real value of the data comes from. Third-party cookies are criticized not least because users are often unaware that their data is being collected and used in this way. A comprehensive overview of how third-party cookies work can be found, for example, in the Ionos article What are third-party cookies?

Good to know

At the end of 2019, the European Court of Justice ruled that users must explicitly consent to the setting of non-technical cookies.

More information

What is third, second and first-party data?

Third-party data is data that has been collected by third-party vendors and can be purchased by companies. This data is collected primarily through the use of third-party cookies. Third-party data is often very extensive, but also more unreliable than the other types of data we talk about here. Among other reasons, this is because the collected data must first be interpreted, which always provides room for misinterpretation.
Second-party data is data that is collected by another company. It is first-party data from another company that you can acquire. This is usually done in fixed partnerships between companies. Even with such a partnership, however, caution is required: For example, it must be very clear which data may be shared at all and how you may use it.
First-party data is data that you collect yourself. The difference to zero-party data is that you derive the first-party data from the behavior of your customers, for example from the visits on your website or social media channels or the purchasing behavior. It is therefore primarily, but not exclusively, behavioral data.

What does the elimination of third-party cookies mean for businesses?

You probably noticed by now: Third-party cookies are already blocked in most browsers. What is great from a data protection point of view also brings with it a problem for companies: a whole range of available data on potential and current customers will not be available anymore. This means that marketers in particular can hardly rely on data that others have collected. So instead, you need a new approach. This is where zero-party data comes in.

What is zero-party data?

Zero-party data is data that your customers actively share with your company. Customers do this, for example, when talking to support staff, in surveys or when interacting with your social media channels.

If you want to use this data, you should always point this out before querying the data! Transparency is particularly important here. By the way: customers are also much more willing to share their data with companies if they know what the data is being used for. This is especially true when it is used to make personalized offers.

Why is zero-party data so valuable?

While a successful data-driven marketing campaign should always be based on a mix of data, zero-party data has one key advantage over other types of data: Your customers want to share this information with you. If you also shine with transparency by always telling customers what you want to use their data for, you’ll find yourself in a win-win situation. Your customers have reason to trust you while telling you the most relevant information themselves. Some companies are already using zero-party data to implement hyper-personalized marketing campaigns.

In essence, zero-party data is exactly what companies have always wanted from their customers: Credible information that customers voluntarily share with the company. Instead of having to interpret data, you get first-hand information that your customers actually want you to use.

If you use SMS to collect zero-party data, consider offering customers to ask for advice

How can you use SMS to collect zero-party data?

The communication between you and your customers will become more and more personal in the next years. This is one of the reasons why it makes sense to use SMS to collect zero-party data.

SMS are perceived as very personal messages, a lot more personal than emails for example. There are several reasons for this. First, most people receive relatively few SMS messages, and second, they receive SMS where friends and family also message them. This combination is key: SMS attract attention and are still personal – these are the best conditions for collecting zero-party data.

Collecting zero-party data – Our examples

There’s no question that a personal connection with your customers makes communication easier. But how exactly can you use SMS to collect zero-party data? Basically, there are hardly any limits to your imagination. However, it is also clear that in this case SMS are most powerful when combined with other media or used to have an authentic conversation. If you want to use the latter variant, you should definitely book your own inbound number.

We would like to show you some examples of how you can collect zero-party data via SMS from your customers. No matter which variant you choose, always tell your customers beforehand that and how you plan to use the data. You should also use SMS very selectively, because the personal touch of SMS also means that too many messages are more likely to be perceived as annoying.

Especially in cases where you send an interactive part, you should make sure that it is kept as short and simple as possible. After all, you don’t want a scientific paper from your customers, but useful information. When in doubt, split your questions into two separate messages that are sent with some time in between.

Send out surveys…

Surveys are great for collecting a wide variety of data, from user experience on your website and during the checkout process to interest in future offers. If you want to collect zero-party data, for example, you can send surveys about how your product is used. This will help you learn what your customers like about your products and what you can do to improve your offering.

…or a quiz

Similar to surveys, but more exciting for customers: Send the link to a quiz or conduct a quiz via SMS. Again, there are numerous options:

How much do you know about healthy eating? How well do you know your bike? Can you cook the perfect steak?

Many quiz forms work well for asking for personal data and fit seamlessly into your content marketing. Of course, it also makes sense to offer a quiz that has overlap points with consultation, such as “Which backpack suits me best?” is you sell backpacks and other bags.

Offer consultations via SMS

Probably one of the best and most comprehensive ways you can choose when using SMS to collect zero-party data is to offer advice and consultations via SMS.

This option combines many advantages. You offer a service that your competitors probably don’t offer, you learn firsthand what’s really important to your customers, and you help them find the product that is perfect for them.

Ask for feedback

You may already be asking your customers for feedback. If not, you should do it! Feedback is very important for your business and SMS are a great way to ask for it. By the way, if customers can reply to an SMS directly, you are more likely to get a response.

Support

Your support team is talking to your customers every day and is already receiving valuable information. It is important that you use this information to learn from it. SMS can help you make the communication between support and customers even more personal.

Conclusion – Should you use SMS to collect zero-party data?

If you want to benefit from the personal touch of SMS, you should definitely use SMS to collect zero-party data. Use inbound SMS to offer your customers the opportunity to engage in a conversation with you. Send links and surveys and have your customers take a quiz. Consultative conversations via SMS offer especially promising opportunities to effectively collect zero-party data.

Conversational marketing will play a big role for companies in the future and communication via SMS is not only suitable for this, but also ensures better customer retention. Just try it for yourself!

All the best,

Header: iStock.com/aelitta, colors edited