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The four types of customer data and what they can do for you

Customer data is a powerful tool; it provides valuable information about customers such as contact details, preferences, and interests. If you can learn to differentiate and harness their power, you'll be leaps and bounds ahead of the competition.

Brands have been over-reliant on data tracking technologies for years, using them as an easy way to justify or pivot their marketing strategies to fit (assumed) customer behaviors. But with privacy policies growing more strict and major browsers like Chrome phasing out third-party cookies, brands are scrambling to rethink their strategies.

Luckily, this shift is nothing to sweat—it's actually a good thing. By relying more on other types of data, like zero-party and first-party, you can drive engagement and get clearer, more actionable information from your customers. We'll break down the landscape for you—starting with an explanation of each type of customer data—so you'll be better prepared for the cookieless future.

What is customer data?

In the modern economy, customer data is a powerful tool for businesses. It provides valuable information about customers such as contact details, preferences, and interests. With this data, companies can create personalized marketing strategies that both maximize user engagement and follow applicable privacy regulations. Knowing how to effectively use customer data can help you target the right audiences and drive more impactful campaigns.

Skillfull marketers can collect customer data from a variety of sources, from all along the journey. Some data collection sources include surveys, website analytics, customer feedback forms, and loyalty programs. Each type of data—zero-party, first-party, second-party and third-party — has its own advantages and disadvantages, so it's important to know how each can meet your needs.

At a high level, zero-party data is gained by directly asking your customer for data via surveys, quizzes, and forms; first-party data is gained by observing your customers' behavior, second-party data comes from trusted partners like Google or Facebook, and third-party data comes from sets of sold data.

Knowing their respective differences and limitations allows you to build an effective marketing strategy based on reliable insights into your customers’ behaviors.

Zero-party data: straight from the source

Zero-Party data (also known as "declared data" or "explicit data") is information provided directly from customers, such as their likes or purchase history. Think of it as the purest, highest-grade data you can mine—the kind that details crucial personal insights into your customers.

With zero-party data, you get insight from your customers directly, without needing to assume who they are, what they like, or how they behave. You can gather helpful zero-party data from your customers through things like quizzes, customer surveys, polls, or feedback reports. These avenues allow your customers to express themselves willingly and intentionally—and grow engagement through the process as well.

As Forbes notes, a margin of error still exists in self-reporting methods. But, generally speaking, the information customers give freely is worth much more—and says a lot more about them—than other, less direct data. Keep in mind, zero-party data is more unique and specific—and therefore more difficult to scale.

A Customer Relationship Management (CRM) partner will help streamline this process, so you can manage zero-party data as it accumulates. If the thought of data management is making you wary, we've got you covered. The Typeform and HubSpot integration syncs leads' responses, so your data (i.e. Typeform responses) is automatically populated and organized in the HubSpot CRM.

Zero-party data is a customer telling you what they think, want, and believe—with the added benefit of engaging them directly in the process. What better way to deepen customer relationships?

Use our free customer feedback form template to start getting real answers for real solutions. Explore the templates.

First-party data: reading behaviors and demographics

First-party data is a close sibling to zero-party data, but includes other passive data sets. There are clear benefits to this kind of information—for one, your company fully owns and controls it because it's pulled directly from your website and customer channels. First-party data if pulled from the behavioral actions of your customers, such as:

  • web activity (i.e. Googel Analytics)

  • demographic data

  • email

  • sales interactions

  • purchase history

When it comes to storing that data, it's important to have a centralized data management platform to ensure all this useful information is standardized and stored in a uniform, consistent manner. This means scaling first-party data can be tricky and expensive—though the payouts are clear, especially with third-party cookies quickly disappearing.

Not only does first-party data provide you with more specific insights, it also helps build revenue for your brand. According to Forbes, a recent Google and Boston Consulting Group study found that those using first-party data for major marketing initiatives saw and increase in revenue of up to 2.9 times (compared to companies that didn't) and saved up to 1.5 times in costs.

Prioritizing first-party and zero-party data is an important first step in staying relevant and competitive as privacy laws become increasingly more strict. Use this as an opportunity to build data sets as unique and varied as your customers. Together you can personalize product recommendations and content based on past purchases or browsing history, streamline product offerings or services, create targeted campaigns for different audiences, and more.

Check out this CMS Wire feature to learn more about distinguishing between zero and first-party data, and how to use it to build personalization for your customers within your brand.

Second-party data: power in partnership

Second-party data is accessed through a trusted partner or platform. Think of it as your company piggy-backing off another source's data—one that you've vetted and know will be useful to your business in some way. You can make second-party data work for you by pulling from companies that are similar to yours and choosing partners whose data-gathering practices you trust.

Four things to keep in mind about second-party data:

  1. Common places to get second-party data are from companies in the marketplace like Google, Facebook, or other platforms you may be partnering with.

  2. Keep in mind that this data isn't yours, and you'll only be able to access it for as long as your agreement or partnership with the data supplier lasts.

  3. The more vast your data stores become, the more difficult it is to sift through it. Start by prioritizing essential data for close analysis, then pull from secondary data stores at a later date.

  4. Your team can still get helpful from these sources, but they won't be as personalized as data you collect and own.

We'll admit it: sometimes it's nice to have someone else do the work for you. And if this data set is truly applicable to your own brand, second-party data can be a great option.

Third-party data: quantity over quality

Last—and honestly, least—is third-party data. While this type of data has certainly had its heyday, customers and brands alike are moving away from this remote, often non-consensual type of information.

Third-party data is aggregated and sold without the customer's knowledge or consent. It's great for gaining large amounts of information, though it's not as high-quality as other forms of customer feedback. Because of the vast nature of third-party data, it can be challenging to sift through for actionable information, bogging you down in data without a clear path to how it helps you or your customers.

When it comes to being a competitive, innovative brand, staying on top of privacy compliance is crucial. With distrust growing and third-party cookies disappearing, reliance on this kind of data can hinder your brand strategically and significantly weaken customer loyalty.

As brands strive towards personalization and deeper customer connections, capturing customer data needs to shift in that direction too. So, while third-party data might be easy and (seemingly) efficient, it's not doing much for your customers, and it's not providing them with a great experience either.

We think the current shift in data collection and attribution models is a welcomed change, asking brands to be more curious and engage more thoughtfully with their audiences than ever before. Read our blog post on the end of the data-driven age as we know it.

If you feel like third-party data strategy is right for you, Gartner has some thoughts on how to make the most of it for B2B customers.

But if you want to engage more thoughtfully with your audiences, check out Gartner's helpful guide on targeting audiences without third-party data.

Data isn't one-size fits all—and that's a good thing. Now that you're crystal clear on the different types of data and how they can work for your business, you can get to work gathering the kind that suits your needs. Remember, data is vast and unique—just like your customers. By paying attention to what it's telling you and organizing it in digestible ways, your brand—and the people it serves—will shine.

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