Email marketing has long been an effective strategy for businesses to reach customers and promote their products or services. With an ROI of 4200%, email marketing helps businesses drive more traffic, leads, and revenue. With such a high return on investment, it’s no wonder that brands continue to prioritize emails in their overall marketing strategies.
With increasing competition and saturation of the digital marketplace, it is becoming more and more challenging for businesses to stand out in the customer inbox. One key to successful email marketing is targeting. Targeted emails have a higher open rate and click-through rate than non-targeted emails.
To achieve effective targeting businesses need data about their subscribers. Traditionally, they have relied on second- and third-party data, such as demographics and behavior, to segment their email lists. However, such data can be expensive and may not always be accurate.
The changing landscape of customer data
With the increasing popularity of ad-blockers and privacy-focused web browsers, it has become tougher for businesses to collect data on their audience. Consumers are becoming increasingly wary of sharing their personal information, and regulations such as GDPR and CCPA have made it more difficult for brands to collect data without explicit consent.
Enter Zero-Party Data. Zero-party data is data that customers or subscribers voluntarily provide. This data includes preferences, interests, and other information that can help businesses understand their customers and create targeted email campaigns. Collecting zero-party data has become essential to stay ahead of competition and drive more targeted and personalized email campaigns.
In this article, we try to understand zero-party data in depth. We look at current trends, future possibilities, and success stories of email campaigns that were created using zero-party data.
What is Zero-Party Data?
Unlike first-party data, which is collected by businesses through their interactions with customers, zero-party data is volunteered by people through various means such as surveys, polls, quizzes, and preference centers. It provides a wealth of insights into a customer’s preferences, needs, wants, and behaviors, which businesses can use to tailor their email marketing strategies.
Now that we understand zero-party data, let’s explore why it is crucial for targeted email marketing.
Why is zero-party data important?
Before diving into the importance of zero-party data, let’s define what it is and how it differs from other data types.
- First-party data: Data a business collects directly from its customers or subscribers: this can include purchase history, website behavior, and contact information.
- Second-party data: Data collected by a partner or vendor and shared with a business: this can include data from social media or loyalty programs.
- Third-party data: Data purchased from a data provider: this can include demographic data or behavioral data.
- Zero-party data: Data voluntarily provided by a customer or subscriber: this can include preferences, interests, and other information not typically collected by businesses.
Zero-party data is unique because it is given willingly by the customer or subscriber. The data is more accurate and reliable than third-party data. It also means that the data is more valuable because it is specific to the customer or subscriber.
According to a survey by the CMO Council, 45% of consumers are willing to share their personal data in exchange for personalized offers and discounts.
Role of zero-party data in email marketing
Collecting zero-party data for email marketing has become increasingly important for businesses for several reasons:
1. Better personalization
Zero-party data can help businesses create more accurate and detailed segments. These, in turn, help create better personalization that leads to successful email marketing campaigns. Consumers today expect personalized experiences, and businesses that fail to deliver such experiences risk losing their customers to competitors. Zero-party data enables businesses to create campaigns tailored to each customer’s preferences, interests, and behavior, resulting in higher engagement and conversion rates.
According to a study by Epsilon, personalized emails have an average open rate of 29.3%, compared to non-personalized emails, which have an average open rate of only 22.2%. Moreover, personalized emails have a higher click-through rate, with an average of 5.3% compared to 2.6% for non-personalized emails.
2. Improved customer experience
Zero-party data enables businesses to understand their customers better, which leads to a better customer experience. By collecting data on their customers’ preferences, businesses can send targeted communications that are more relevant and useful to their customers. It results in a more positive customer experience, which can lead to increased loyalty and repeat business.
According to a study by Accenture, 91% of consumers are more likely to shop with brands that recognize, remember, and provide relevant offers and recommendations.
3. Increased engagement and cart recovery
By understanding their customers’ interests and behaviors, businesses can create email campaigns targeted at specific outcomes. Such outcomes can include increased brand awareness, customer loyalty, and cart recovery. On average, 69.57% of shoppers abandon their carts. However, with the help of zero-party data, businesses can create personalized “nudge” emails that can effectively persuade shoppers who abandon their carts to complete the purchase.
According to a study by Experian, personalized emails have a 29% higher unique open rate and a 41% higher unique click rate than non-personalized emails.
4. Higher ROI
Zero-party data can help businesses achieve higher ROI on their email marketing campaigns. They can drive more sales by customizing the email entirely. From subject line to name to body copy to offers, every email component can be tailored for customers. This leads to less drop-offs, more conversions, and eventually a higher ROI for their email marketing campaigns.
According to a study by Campaign Monitor, personalized emails have a median ROI of 122%, four times higher than non-personalized emails.
- Netflix uses zero-party data to suggest movies and TV shows to its subscribers based on their viewing history. As a result, Netflix increased its revenue by 24% and its subscriber base by 37%.
- The South by Southwest (SXSW) festival used zero-party data to target emails to people who had previously attended the festival or expressed an interest in attending. Outcome, SXSW increased its attendance by 14% and generated $355 million in revenue.
- Sephora, a beauty retailer, used zero-party data to send personalized recommendations to customers based on their skin tone, hair type, and makeup preferences. By doing so, Sephora increased its email open rate by 50% and generated $2.5 billion in revenue.
- Yumi, a baby food delivery service, reduced cart abandonment by 20% by sending personalized emails that included a discount code to customers who left items in their cart.
- HubSpot, a marketing automation software company, reduced its email churn rate by 10% by implementing a preference center.
Top trends in zero-party data collection
Zero-party data collection is becoming increasingly popular among businesses for the many benefits it offers. Here are some current trends across industries.
1. Interactive content
Interactive email content such as quizzes, polls, and surveys are becoming increasingly popular as a means of collecting zero-party data. Interactive AMP emails engage customers and encourage them to share information about their preferences and interests, which can help businesses create result-oriented campaigns.
2. Preference centers
One way to reduce email churn is to give subscribers control over the content they receive. With the help of a preference center, businesses can let subscribers choose the type of content they want to receive, how often they want to receive it, and in what format. Preference centers are becoming increasingly popular as a means of collecting zero-party data.
Data privacy and security are top concerns for consumers. Businesses can build trust with their customers and subscribers by obtaining data with consent aka zero-party data. When customers feel that they are in control of their data and that it is being used to benefit them, they tend to be more forthcoming with details.
According to a survey conducted by the Winterberry Group, 69% of marketers believe that zero-party data will be important to their data strategy over the next two years. In addition, a report by the Relevancy Group found that marketers who leverage zero-party data in their email campaigns have a higher email engagement rate than those who don’t.
Zero-party data is a powerful tool to help businesses create successful email campaigns. By understanding their customers’ preferences, interests, and needs, businesses can create personalized and targeted emails that drive more traffic, leads, and revenue. Whether it’s reducing cart abandonment, improving customer loyalty, increasing event attendance, driving sales, or reducing email churn, zero-party data can help businesses achieve far superior marketing results.
As the use of zero-party data continues to evolve, email marketers will be able to develop one-on-one campaigns in future that will result in the ideal customer experience for every individual.
How we can help you
We, at Netcore, can help you collect, analyze, derive insights, and leverage zero-party data to maximize your ROI from your email marketing.
We are leaders in email deliverability and transactional email space; and the world’s most recommended ESP as per G2.com. For the second year in a row, Netcore received the highest overall customer rating as a Customers’ Choice in the 2022 Gartner Peer Insights ‘Voice of the Customer’ Report.
We were also recognized as “Ahead of the curve at applying AI to marketer workflow” in The Forrester Wave™: Email Marketing Service Providers Report 2022.
Connect with us to understand how you can benefit from our expertise and experience – we send over 20 billion emails a month on behalf of 6500+ businesses across 20 countries.