What Is Zero-Party Data?

Posted on by Bryan.Formhals

 

Author: Camille Rosa, Senior Marketing Specialist

All marketers know….data is king. And lately there’s been a new type of data sitting on the throne, known as zero-party data. If you don’t closely follow the data landscape, this is likely a new term you’ve heard floating around, unsure of its meaning for marketers. With the state of the market today, zero-party data is a crucial tool that all marketers should become familiar with. 

Changing Consumer Behavior  

It’s no surprise that consumers are becoming more concerned about their data and how it’s being used. With fears of data breaches or invasive data tracking, consumers are more wary than ever of how their data is collected.  

At the same time, consumers want a personalized shopping experience – one that makes product recommendations based on their interests and doesn’t just blindly advertise to them. Can consumers have the best of both worlds – data privacy and a personalized advertising experience?  

This is where zero-party data enters the chat.  

What Is Zero-Party Data? 

Zero-Party data is relatively new to the data scene. Forrester Research coined the term in 2018, defining it as “data that a customer intentionally and proactively shares with a business.” It can include preference center data, purchase intentions, personal contexts, and data on how an individual wants to be recognized by the brand.” 

Instead of relying on tracking consumers, zero-party data allows consumers to voluntarily offer personal data to a brand. In exchange, consumers are expecting their freely given information to improve their shopping experience.  

Let’s go over some examples of questions brands might ask to gather zero-party data: 

  • “Tell us about your most recent shopping experience with us.” 
  • “How much does sustainability impact your purchasing decisions?” 
  • “What problem does this product/service help you solve?” 
  • “What are some of your hobbies?” 
  • “Do you prefer one email per week or one every two weeks?” 

How do brands capture the answers to these questions? 

  • Pop-up windows  
  • Opt-in forms 
  • Social media prompt questions 
  • User profiles 
  • Polls, quizzes, and surveys 

 

How Does Zero-Party Data Fit into the Data Landscape? 

Zero-Party Data – This type of data is voluntarily given by the consumer and thus requires no inference or analysis to determine its meaning.  

First-Party Data – This type of data comes from consumer information such as tracked website activity, purchase history, or contact information to make educated assumptions about the consumer’s interests. First-party data is a highly accurate source, but still requires analysis, unlike zero-party data. 

Second-Party Data – This type of data is another company’s first-party data that is received via some type of partnership. The same type of information as first-party data is collected, but it’s not directly from the first source. 

Third-Party Data – This type of data is bought from an outside source that is not the original collector. 

 

Zero-party data

 

Death of Third-Party Cookies 

As consumer data tracking has become more regulated and privacy concerns have grown, third-party cookies have become phased out by several companies, including Firefox and Safari. Google is set to have them fully phased out by 2024. 

What does this mean for marketers? Privacy will remain a concern for consumers. Now is the time to begin collecting data in other consent-based methods, such as zero-party data. 

Using Zero-Party Data in Your Marketing  

One sure-fire way to grow revenue is to show consumers products and services that are tailored to their interests. It’s a no brainer, right? Brands have been doing it for years.  

Not only is zero-party data the way of the future, but it is also more accurate as it comes explicitly from the consumer. When used in combination with first-party data, marketers can gain extremely valuable insights into the desires of consumers, ultimately offering them a better brand experience with less controversial data methods.  

Now is the time to do an audit of how you are collecting your data and how you’re making the data work for you.  

Learn more about our data services and how we provide prospect leads by utilizing multiple data sources and generating predictive models here. 

 

Evolving Your Direct Mail Strategy In a Changing Economy

Posted on by Bryan.Formhals

 

Author: Bryan Formhals, Senior Marketing Specialist 

It’s hard to avoid reading about inflation and predictions of a recession in the news. Supply chain snarls, the war in Ukraine, and labor shortages have all contributed to the highest inflation in over 40 years.  

In response, the Federal Reserve has been raising interest rates and is likely to continue raising them in 2023. However, the jury is still out on whether the Federal Reserve can pull off a soft landing without pulling us into a recession.  

What to Expect in the Industry  

Consumer sentiment is a key indicator of where the economy is headed and it’s looking a bit grim right now. According to the second-quarter 2022 PRINTING United Alliance/NAPCO Research State of the Industry, around 79% of consumers expect “bad times” in the year ahead for business conditions, the poll number highest since the great recession in 2009. 

It’s no secret that during an economic downturn, marketing budgets are often one of the first area companies make cuts.  Less than excellent economic conditions mixed with tight labor and difficult supply chains creates the landscape marketers are facing. It’s gloomy but business goes on during challenging times. Marketers can stay a step ahead by evolving their strategy, tactics, and process out of necessity.  

With our 60 years of experience, Nahan has seen its share of economic peaks and valleys and have learned from these experiences on how to work with marketers to optimize their direct marketing programs to remain effective and focused on growth.   

Review Your Programs and Vendors 

With budgeting season upon us, it is important to know how your direct mail is performing and whether you’re spending your dollars effectively. In times like these, it’s critically important to ensure you’re getting the most return possible for your investment. 

The knee-jerk reaction might be to start slashing, but that often causes more harm than good long term. If you’re not thoughtful about the cuts, you’ll often find programs worsening in performance, ultimately leading to further cuts, and thus create a downward spiral.  

Instead, you’ll want to review your most effective programs to make sure they align with your current goals. It’s also a good opportunity to review your vendors to see if there are possibilities for improved efficiency. A few important questions to consider:  

  • Has your data vendor fully optimized your mailing list with predictive analytics and refined targeting strategies?  
  • Has your creative agency been successful at building test packages that successfully turn into control packages or are your packages experiencing response fatigue?  
  • Do you have a regular testing program aimed at creative and data? 
  • Has your production and mailing partner discussed options for optimizing your formats and campaigns for production efficiency and postal savings?  
  • Are your partners helping you take advantage of USPS promotions and discounts? 
  • Are you confident in your response and conversion attribution – do you know for certain which channels are driving performance? 
  • How can strategy, data and creative more effectively work together to achieve your results?  

With the right partners in place, asking the right questions, it’s time to make sure you’re optimizing for improved ROI. This is where you can uncover opportunities for efficiency if you focus on the next topic: testing.  

About Data Testing 

Effective direct marketing is the convergence of data, creative, strategy, and testing. Whether the economy is humming along or in a recession, testing and optimizing will always be critically important. Here are three steps you can take… 

  • Implement Predictive Modeling: Direct mail is all about generating a response from your customers. Predictive modeling using sophisticated analytics will help predict the likelihood of a response or conversion from your mailing. At Nahan, we work with our partners to utilize your current customer base and promotional history to help you target the best prospects and customers, allowing you to be more selective in who you mail to. 
  • Creative Format Testing: Finding the right creative formats to present your messaging and offer is key and you have options. You’ll want to test for efficiency and economic optimization to improve your ROI. For example, if you are sending out catalogs, shaving an inch from the page size, or reducing the page count may not save you money on paper, but it could push you into letter-rate postage which will creative significant savings.  
  • Creative Message and Offer Testing: Finding the right message and offer is a constant challenge in direct mail. Is your offer competitive and unique? Consumers can be fickle. If they are in a more conservative mindset due to economic uncertainty, brands will want to adjust their messaging or offer strategy to entice them to take action and convert.  

Mail Smarter: Find the Opportunities 

There are always opportunities for greater efficiency and effectiveness in the direct mail channel, no matter the economic climate. We have a mantra at Nahan and we think it’s appropriate for every brand to keep it top of mind: It’s time to start mailing smarter! 

In an economic downturn, there will be shifts in the industry and more than likely the mailbox will become less populated. But if you are mailing smart, that means when your message does arrive, it will become more prominent.  

There are always opportunities to optimize your budget. For example, take advantage of USPS promotions. Through the remainder of the year, direct marketers can save 4% on postage simply by including Informed Delivery as part of their campaigns. At Nahan, we have streamlined this process, so all our customers need to do is say “Yes!” and it’ll be added to their program.  

We don’t know just yet which way the economy will turn the remainder of 2022 and into 2023, but no matter what, marketers can find opportunities to improve ROI by mailing smarter. We’re confident if you do this, you’ll come out on the other side with a much more effective direct mail program. 

Are you currently testing your direct mail programs?

Testing is a key component of any successful direct marketing program. The most impactful direct mail marketers are constantly testing creative, lists, and offers, which enables them to make marketing decisions armed with more insight.

We have found that testing means different things to different people. Clients approach it in a variety of ways.

In this white paper, we provide an insiders guide to effective direct mail testing for programs of all sizes and across industries. It doesn’t matter if you’re just getting started with testing or a seasoned pro, our guide will provide you with actionable insights you can implement today.

Learn how the four phases of the testing process work together to drive optimization.

  • Research
  • Pre-Testing
  • Testing
  • Post-Campaign Assessment

If you’re ready to test smarter and drive ROI for your program, fill out the form below for the full guide to direct mail testing today! 

Direct Marketing Strategy: Direct Mail Testing

Posted on by Bryan.Formhals

Author: Maggie Stack, Account Director

At least once a week, while doing homework, one of my kids will say “when will I ever use this in real life?” I like to point out to them how often I use my Algebra skills, but I never thought I would use science in my marketing career. As my colleague, Alan Sherman, mentioned in a previous blog, we use direct mail testing to determine the best direct marketing strategy. This is where science comes in. By following the steps of the scientific method with a continuous improvement mindset, we aim to exceed our clients’ marketing goals.

Purpose

When thinking about our clients’ direct marketing strategy, our question is always how can we improve results. The exact Key Performance Indicator (KPI) we are trying to improve varies by client, but it always means a better Return on Marketing Investment (ROMI).

Research

We start by reviewing current marketing efforts. Who is the target audience? What motivates them to respond? What tactics are currently being used? How do those tactics work together?

Hypothesis

Once our research is complete, we make recommendations for the elements or options we believe will improve results. Sometimes this is the choice to reduce the cost of a campaign while maintaining response and sometimes it is a higher cost option that will improve response. This could be a new data source, a new offer positioning, a new direct mail format, or addition of a complimentary digital tactic. In direct marketing, the options are truly endless. Once we decide on what will be tested, we can begin the experiment!

Experiment

The two most commonly used experiments in direct mail testing are a split test and a multivariate test. Split tests, or A/B tests, involve testing the same package except for the specific element to be tested. Multivariate testing involves testing multiple elements at the same time. The right one to use is based on several factors: budget, available quantity, quantity needed for the result to be statistically significant, and the number of items we want to test. Once the experiment is in the hands of the prospects, we wait for results.

Analyze Data

Depending on what we are measuring, results could take months to gather. There must be enough responders to be confident in the results. Analysis comes in the form of charts and graphs. Our goal is to always improve results, but sometimes we learn what does not work. As my high school science teacher would say after a failed experiment, “if you learned something, the experiment wasn’t wasted.” In direct marketing, the win in a losing test is that it leads to better, more refined hypotheses.

Conclusion

While there is a conclusion to every individual experiment, direct mail testing should never end.  We believe marketers should always be striving to improve their data, improve their messaging, and improve the tactics they use. And we love partnering with those that feel that same. Looking to apply a little bit of the scientific method to your direct marketing strategy? We are here to help.

Bio: Maggie Stack is an Account Director with over 20 years of experience in marketing services and direct mail production. When she isn’t discussing data and creative with her clients, you can find her and her husband cheering on their children in hockey, baseball, and dance.