Data privacy continues to be a major concern as the amount of personal data being collected and shared by individuals, businesses, and governments continue to grow.
Some key trends in data privacy to consider in 2023, include:
- Increased regulation: Governments around the world are beginning to implement stricter laws and regulations to protect personal data. For example, the European Union’s General Data Protection Regulation (GDPR) set a high standard for data privacy that has influenced legislation in over 100 countries.
- Growing awareness: As the public becomes more aware of the potential risks associated with sharing personal data, they are increasingly demanding greater control over their own information.
- Data breaches: Data breaches, in which personal information is lost or stolen, are becoming more common and can have serious consequences for individuals and organizations.
- Privacy-focused products and services: There is a growing demand for products and services that prioritize privacy, such as encryption tools and virtual private networks (VPNs).
- Ethics of data collection: There is also a growing debate about the ethics of data collection, including whether it is appropriate for companies to collect and use personal data for targeted advertising or other purposes without explicit consent.
Zero party data
Zero-party data also known as ZPD or 0PD is information that your customer willingly and proactively provides to you, without being prompted. This can include information such as preferences, intentions, and interests.
In contrast to first-party data (which is collected through forms and applications) and third-party data (which is collected from external sources), zero-party data is provided directly by the customer, voluntarily, often in exchange for some value such as personalized recommendations or customized experiences.
Because zero-party data is provided willingly, it is generally considered to be more valuable and trustworthy than other types of customer data. It can also be used to improve the customer experience by enabling companies to offer more relevant and personalized products and services.
Here are a few examples of how your organization might use zero-party data to provide personalized recommendations:
- As a streaming video service, you might ask users to select their favorite genres of movies and TV shows, and then use that information to recommend similar content.
- As an online retailer, you might ask customers to create a wish list of products they are interested in, and then use that information to recommend related items or send personalized sale alerts.
- As a food delivery or restaurant business, you might ask users to indicate their dietary preferences and allergies, and then use that information to suggest dishes that meet those requirements.
- As a health, lifestyle, and fitness company, you might ask users to set goals and track their progress, and then use that information to suggest personalized plans and suggest new ideas to try.
If you’re in retail, you can use zero-party data to improve customer experience in a number of ways, such as:
- Personalized recommendations: By collecting information about a customer’s preferences and interests, retailers can use zero-party data to make more relevant and personalized product recommendations.
- Personalized promotions: Retailers can use zero-party data to send personalized promotions and special offers to customers based on their interests and purchase history.
- Improved targeting: Retailers can use zero-party data to better target their marketing efforts and reach customers who are most likely to be interested in their products.
- Improved customer service: Retailers can use zero-party data to provide more personalized and efficient customer service, such as by suggesting relevant products or providing personalized support.
If you’re in the service business, you can use zero-party data to provide:
- Personalized support: Service providers can use zero-party data to provide more personalized and efficient customer support, such as by suggesting relevant services or providing personalized assistance.
- Improved service design: Service providers can use zero-party data to design services that better meet the needs and preferences of their customers.
By collecting zero-party data directly from your customers, you can improve the relevance and personalization of your recommendations, which can help to improve the customer experience and long term customer loyalty.
What is second-party data?
Second-party data is data that is collected by one organization (the first party) and then shared with another organization (the second party). This data is often collected through first-party relationships, such as when a customer opts in to receive communications from some company.
Second-party data can be shared through a variety of means, such as through data partnerships, data co-ops, or data exchanges. It can also be shared in a more ad-hoc manner, such as when one company shares data with a specific vendor or partner.
Second-party data can be valuable to the second party because it allows them to access information about a specific group of individuals that they may not have been able to collect on their own.
The problem with third-party data
Third-party data is information that is collected by an organization other than the one using the data. It is often collected and sold by intermediaries, such as data brokers or marketing companies.
Third-party data can come from a variety of sources, such as public records, online and offline behaviors, and demographic information. It is often used for targeted advertising or to supplement a company’s own data.
While third-party data can be valuable, it can also raise concerns about privacy, accuracy, and control.
There are a number of potential issues with third-party data:
- Quality: Third-party data is often collected and sold by intermediaries, rather than being collected directly by the company using it. This can lead to issues with the accuracy and completeness of the data.
- Lack of consent: Individuals may not be aware that their data is being collected and sold to third parties, and they may not have given their explicit consent for this to happen. This can be a concern from a privacy standpoint.
- Outdated information: Third-party data may be out of date by the time it is purchased and used, which can lead to inaccuracies or a lack of relevance.
- Limited control: Companies using third-party data may have limited control over how the data is collected and may not be able to ensure that it is collected in a legal and ethical manner.
- Increased risk: Because third-party data is often collected and shared by intermediaries, there is a risk that it could be lost, stolen, or misused, which could have serious consequences for both individuals and organizations.
The Pretectum CMDM supports you in the management of all types of customer data but focuses particularly on your ability to integrate your data collection methods into a unified repository of optimized customer data.
Centralized customer master data management is ideal but for some organizations, a more hybridized approach may be required. Contact us for more information.