Understanding the various data types is key to creating effective marketing campaigns that drive repeat business.
Traditionally third-party data has worked well for Shopify businesses. However, shifting attitudes around privacy have brought first-party data to the fore.
With that in mind, let’s dig into each data type, their pros and cons and how you can use them to build stronger relationships.
Zero-party data is a relatively new term that describes the information your customers share with you directly via your Shopify store. While similar to first-party data, it differs in that customers have explicitly stated their preferences.
Zero-party data is the personal information your customers give you in exchange for a better user experience. It can include data you gathered through surveys or customer feedback.
Zero-party data is invaluable, as your customers provide details which help you provide a more personalized experience.
Privacy regulations, such as GDPR and the CCPA, are protecting consumer privacy and allowing for users to easily opt-out of being tracked. Due to this, marketers are utilizing their own zero-party data that their audiences voluntarily provide to market and nurture them for future sales.
In contrast to zero-party data, first-party data includes inferred preferences based on customer interactions with your brand – when purchasing through your checkout, for example.
First-party data is the personal information you collect on your owned marketing assets like your website. It can include anything from behavioral data to subscription and social data.
Like zero-party data, first-party data is valuable as it costs nothing to attain and is given freely by the user – indicating a willingness to engage with your brand.
To set yourself up for success, you must optimize how you collect and use first-party data. The key is ensuring everything is done compliantly to get the most valuable information you can actually use.
Prioritizing your first-party data will help you create stronger customer relationships while improving your marketing campaigns’ return on Investment (ROI).
Second-party data is the first-party data that somebody else owns. You can buy this data directly from them. It can include many of the same data sources as first-party data, including websites, social media profiles or survey responses.
You can purchase second-hand data from a trusted partner. However, it can be difficult to confirm if the information was collected compliantly in line with privacy laws like GDPR and CCPA.
While second-party data can be helpful, the indirect nature of the customer relationship makes it much less effective than first-party owned data.
When you target someone on Facebook, you are using third-party data or data that belongs to Facebook that you rent for your campaign. Facebook combines their base data (pages a user follows) with information from advertisers and with data obtained from third-party aggregator partners.
Third-party data is popular due to the large volume and ability to target specific segments. However, as we have outlined above, the effectiveness of this data has declined massively as consumers take more control over their privacy.