What We’ve Got Wrong and Why It Matters

Zero-Party Data (ZPD) has emerged as a powerful tool for brands to cultivate a more personalised and transparent relationship with their customers. At its core, ZPD refers to data that a customer intentionally and proactively shares with a brand, encompassing personal preferences, insights, and feedback.

However, there are several misconceptions about ZPD that have hindered its full potential. As Customer Data becomes the key strategic asset for all consumer brands, it’s time to demystify these misconceptions and highlight why getting ZPD right is crucial for brands looking to build deeper connections with their customers.

Misconception: ZPD is a New Concept

The term Zero-Party Data might be new, but the concept is not. Brands have been collecting personal insights through loyalty programs, surveys, and feedback forms for years. What’s changed is the emphasis on consumer control, the huge volumes of data now potentially in play, and the AI and machine learning tools available to process them locally and in context.

Historically, data collected was often buried in databases, with customers having little awareness of its collection or use. Today, ZPD can put customers in control, allowing them to share data transparently and understand its purpose. The true potential of ZPD lies in extending this to fuel AI-driven customer empowerment.

Zero-Party Data is Far More Than Self-Reported Data

Traditionally, ZPD has been seen as self-reported data—preferences, feedback, and interests directly communicated by customers. However, this perspective limits ZPD’s potential.

It is now technically possible to empower customers to participate with their own data. It creates a step before the sharing of ZPD, where customers connect digital data from their lives (their Life Data) and bring it securely into their customer app. That data is processed locally, and customers share insights and signals directly and explicitly with brands to receive better life outcomes. This process redefines a mutually beneficial value exchange.

This expanded definition of ZPD encompasses an array of digital Life Data that customers collect about themselves and are happy to contribute, in confidence, to help get their jobs done. This Life Data might include:

• Device Usage Patterns: Customers collecting and sharing their use of smartphones, tablets, or other devices, plus native data such as accelerometer or location.
• App Interactions: Data connected from various applications such as fitness trackers, shopping apps, banking services, streaming services, and social media.
• Online Behaviour: Browsing history, search queries, and online purchases.
• Connected Devices: Information from smart home devices, wearables, and other Internet of Things (IoT) devices.
• Third-Party APIs: Census, Smart Meter, Weather Data, Driving License, etc.

When combining this diverse digital Life Data with customer history data, a customer’s app generates insights beyond simple preferences or feedback, in turn revealing patterns, behaviours, and needs that transactional data alone can’t provide. Through this participation with customers and their data, brands will deliver better customer outcomes and gain significant competitive advantage.

Protecting The Most Sensitive Data: Zero-Shared Data

When this Life Data is processed locally on the customer’s own device, insights and signals are surfaced without the need to share the most sensitive personal data. We call the data that stays on device, is processed locally to generate signals, but not shared, “Zero-Shared Data.”

The concept of Zero-Shared Data protects brands from a growing list of data risks. By 2025 it is likely that the majority of US states will have Privacy laws in play, each one with a different definition of sensitive data. Processing sensitive data privately on the customers own device moves the brand ahead the regulation.

Pre-processing insights on customer devices also saves on IT costs. Most importantly, providing customers with their own confidential data store and processing data locally creates reassurance and earns trust – the foundation of all healthy, long-term relationships.

Moving Beyond Transactional Data

One critical issue brands face is the historic tendency to prioritise transactional data over personal insights. Transactional data, including purchase history, is valuable and is table stakes data for loyalty programs, but only tells part of the story.

Personal insights (call them personal signals) composed of preferences, motivations, and feedback, offer a richer, more nuanced understanding. Brands often focus on what customers buy rather than why they buy it. Going beyond the transaction, what is the job that the customer is actually trying to get done?

Embracing Personal Insights

To fully leverage ZPD, brands must shift their focus towards collecting and utilising personal insights and live, contextual intent signals. Engaging with customers meaningfully to understand their preferences, values, and motivations is essential. By doing so, brands can tailor offerings and communications to better align with individual customer needs, fostering loyalty and trust.

Solving for Customer Jobs and Outcomes

Going further and employing Jobs-To-Be-Done thinking, we know that customers hire brands to get their jobs done to achieve desired functional, emotional, and social outcomes.

Now, customers can “hire” brands to know them better by granting them permission to use their Life Data, so the brand can serve them with better outcomes. This transforms the typical loyalty program from a transactional ‘earn-and-burn’ relationship to an experiential, reciprocal partnership.

Value to the customers grows as they participate. Insights and signals accumulate over time to build context, enabling brands to provide increasingly better outcomes, more symbiotic customer lock-on and reduced churn.

By understanding customer’s desired outcomes in aggregate, it becomes possible for brands to automate identification of unmet needs and adjacent whitespace opportunities. When executed successfully, this framework generates higher revenue, customer satisfaction and lifetime value.

The DataSapien Advantage

DataSapien was created to shift power of data ownership and management to consumers and in turn to benefit the brands they “hire” by enabling them to work with a richer dataset and more real-time context than ever before.

DataSapien’s groundbreaking ‘customer edge’ technology empowers customers to hold their own Zero-Shared Data on their personal devices, processed with advanced personal intelligence to surface private insights. Customers then choose to share these insights directly and transparently with brands as Zero-Party Data.

Benefits of true Zero-Party Data

1. Enhanced Personalization: Understanding individual preferences and motivations in the context of lived-experience, enables brands to create more relevant experiences, leading to higher customer satisfaction and loyalty.
2. Increased Trust: Transparency in data collection and usage fosters trust. When customers feel in control of their data, they are more likely to share valuable insights.
3. Better Decision Making: Access to rich personal insights enables brands to make more informed decisions about product development, marketing strategies, and customer engagement.
4. Compliance and Security: DataSapien’s technology ensures data is processed securely on the customer’s device, reducing the risk of data breaches and compliance issues. Customers retain control over their data, aligning with regulatory emphasis on data privacy.

Getting ZPD Right

To get Zero-Party Data right, brands need to adopt a customer-centric approach:

• Empower Customers: Provide tools for customers to collect and analyse their own data, making it easy for them to share insights securely.
• Be Transparent: Clearly communicate why data is being collected and how it will be used. Ensure customers feel in control of their data and can opt-out if they choose.
• Encourage Participation to Build Trust: Show customers their data is valued and secure. Provide a clear value- exchange and fair incentives to participate. Use data responsibly to enhance their experience and demonstrate the benefits of sharing personal insights.

What’s Next

Zero-Party Data is much more than self-reported preferences or feedback. It encompasses a vast array of digital life data that customers collect, process, and share to create meaningful insights.

By embracing this holistic approach, brands can finally unlock hyper-personalization, build stronger trust, and create significant new customer and brand value.

DataSapien’s innovative technology provides the tools necessary to harness the true power of ZPD, paving the way for a new era of customer engagement and data-driven decision-making.