Customer data is incredibly beneficial for allowing company representatives clear feedback about what people like and dislike, along with the aspects that would earn or retain their loyalty. However, this is an era when many hesitate to provide information about themselves, typically because they want to know how the recipients will use it. Zero-party data can solve these problems.

It comes directly from those who choose to share it with the respective entities requesting it. However, that willingness is much likelier to develop when those providing the information have high levels of trust in the businesses. Leaders can encourage such positive outcomes by explicitly explaining why they want the data and what they will do with it once obtaining it.

Today’s Companies Face a Customer Trust Problem

Research shows customers feel 20% more satisfied when they have positive service interactions. Accurate data about those engagements and others can help decision-makers know what to do and say in each interaction.

For example, information about what shoppers buy and how frequently can inform salespeople’s upselling attempts. Additionally, once support team members refer to email or call records and see what they have tried so far to resolve problems, they will be well-equipped to provide targeted solutions.

However, a pervasive and challenging reality is many customers are less willing than they once were to give data to businesses. Sometimes, the reluctance is because they worry about the information being stolen or mishandled. Alternatively, others raise concerns about advertising becoming too invasive once personal information shapes it.

Interestingly, a 2024 study revealed a significant gap in executives’ perceptions of buyers’ trust and what those parties actually feel. The data showed 90% of corporate leaders think their consumers have high trust in their enterprises. Unfortunately, only 30% of them agree with that assessment of themselves.

Those involved with corporate data processing decisions can start to close that gap by cultivating radical transparency. When people know what will happen when they provide their information, they will be more likely to reach confident decisions about their consent. Although zero-party data is not the only type of information brands gather, it is increasingly important today.

What Kinds of Data Can Businesses Get From Customers?

Representatives can gather data from consumers in various ways. Here are the main types and their potential sources:

• Zero-party data: This is information customers intentionally and proactively share. For example, someone might fill out a survey and send it back to an entity they have purchased from for years.
• First-party data: First-party data is very similar to zero-party data, except that it includes information not shared proactively but gathered with consent. Examples include someone’s purchase history and website activity details.
• Second-party data: Second-party data comes from specialist partners that obtain it on behalf of the companies receiving it. When working with this type, it is crucial to find data providers that operate within the boundaries of the respective privacy laws.
• Third-party data: Third-party data comes from aggregators. Although these entities do not get the information from people directly, they work with numerous organizations to source the information before compiling it.

Although all these data types can be valuable when strategically applied and analyzed, many marketing professionals view zero-party data as the most desirable. It should give the purest picture of how shoppers think since it comes directly from those who freely provided the details.

It is also notable that 48% of respondents in a 2024 study said they would be more likely to trust firms that collect zero-party data. Eighty-four percent of Americans additionally felt concerned about data privacy when interacting with online enterprises. Those two statistics taken together suggest zero-party data goes a long way in earning trust.

A Ripe Landscape for Customer Data

Now is a particularly opportune time for marketers, business owners and others to investigate how to learn more about buyers, particularly through zero-party data. Many people are now highly comfortable engaging with brands, whether stocking up on their favorite products, reviewing what they buy or trying new offerings.

The rise of connected products and smart home devices has also greatly facilitated how and when consumers can share things about themselves with businesses. Consider how, by 2019, analysts expected a worth of more than $40 billion for the smart home market by the following year. That projection emphasizes the early popularity of devices that allow customers to provide data about themselves as they go about their lives.

Indeed, the smart home momentum has continued. Newer estimates suggest the market’s revenue will exceed $154 billion by the end of 2024. Additionally, that same more recent source showed the average individual smart home generating more than $365 in revenue, indicating people with connected products use them to engage with organizations and purchase from them.

Many also appreciate that there are few or no barriers between themselves and the enterprises they love due to the rise of chatbots, social media and branded apps. Corporate representatives value such interactions because they reveal what matters to buyers and which aspects will drive future purchases. Similarly, those people like opportunities to provide data to the brands they love, especially if doing so will enable better personalization.

Personalizing the content audiences see can be tricky, though. A 2024 study showed 76% of participants view brands negatively when they receive inaccurately personalized content. Fortunately, zero-trust data can increase those misguided attempts.

Creating Happy, Trusting Customers

Developing a plan for collecting and using zero-party data can be instrumental in building a customer base that feels highly satisfied with and connected to their preferred companies. Realizing that ideal allows modern business owners to encourage loyalty and expand their reach.