Will AI generate a zero party data revolution?

Thomas Peham, left, VP of Marketing at enterprise CMS Storyblok, discusses how AI could make zero party data collection easier and more consistent 

Data is the lifeblood of modern business. It fuels everything from logistics and product development through to customer service and HR. In theory, the more insights a company can gain from its data the better its decision making will become. This creates clear incentives for companies to find more innovative ways to collect and analyse data.

For marketers, accurate and detailed customer data is essential to running impactful personalised campaigns. Many marketing professionals know that the source of this personal information has an outsized bearing on just how effective they can be. First, second and third party data usually makes up the bulk of customer databases. However, arguably, the holy grail is first party data – information that customers intentionally and proactively provide to influence how a brand sees them. On paper, this information should be highly accurate, be exactly what you require for your campaign, and plug gaps in your knowledge that cannot be obtained from other sources. It’s worth noting that other sources, particularly third party data, are becoming harder to collect as data privacy laws tighten, tools such as tracking cookies become less effective and customers become more aware of online privacy.

Securing zero party data is, in most cases, a lot harder. Many people are weary about offering up sensitive information unless there is a clear benefit. Creating innovative ways to collect this data is also quite tricky – there are only so many different ways you can survey a customer. Unlike other data sources which are constantly renewed with new information, zero party data tends to be difficult to update which means it can soon become outdated as a customer’s preferences and circumstances change. This can leave marketers frustrated – they know the best way to get accurate data to fuel personalised campaigns is to engage directly with their customers, but they lack the tools to do this consistently to make it worthwhile. Until now.

We’ve all heard plenty about AI and its use cases within marketing. More recently the conversation has been dominated by generative AI and its ability to automate the creation of marketing copy, however, less has been spoken about how AI enabled chatbots might change the game for the collection of zero party data.

At the moment AI chatbots have largely been confined to customer service and in a few instances, specific tools such as money management. It’s safe to say that these customer service bots have previously had a slightly mixed reputation given their limitations in functionality. With the advent of LLMs, the door has been opened to much more engaging, smarter and more personal chat experiences. Many developers are already well on their way to creating these tools. In fact, a new app segment of ‘companionship’ AIs has been born over the last six months. The purpose of these apps is to provide a partner experience. Essentially, giving people comfort through conversation. It speaks to a truth about human nature – we are social animals and will happily engage in conversation if we find it enjoyable. From the popularity of these apps, it appears that many people do not mind if these conversations are simulated.

This all might seem quite far removed from businesses collecting zero party data, but it provides an interesting insight for marketers. If they can create AI experiences where customers will consistently converse with their brand on a personal level it could open the door to a rich new source of zero party data. Clothing retailers could develop chatbots that, in the context of making small talk, ask questions about the customers’ fashion preferences and so forth. The crucial element is that this engagement could be ongoing. By making the experience varied, interactive and useful, the chatbot can become part of the customers daily or weekly routine. Consequently, there will be more and more opportunities to ask questions that result in valuable, up-to-date zero party data.

SME Publications/ SME XPO 2024

There are of course a few caveats. As with all data collection methods there should be transparency and a clear value exchange. People should not be tricked into providing answers and they should receive something in exchange for giving up some of their personal information. Brands need to think creatively about how they can strike a balance between providing an enjoyable experience and fulfilling their data collection strategy. Nevertheless, such is the power of AI, you can easily see how these types of apps could be integrated into a more holistic customer experience. The chatbots could provide insights on the latest trends on social media, deals from your website, information on product availability, insights on their previous purchasing behaviour, and much more.

It’s no secret that advances in AI have made many people fear that their roles or skills may soon become obsolete. This is especially true in marketing. However, it is better to view AI through the lens of how it can make your job better. Yes, some more menial tasks may become automated, but this will create more time for creativity. It may be that you spend less time writing copy for an email marketing campaign and more time designing scenarios to engage customers on an AI chatbot.

SME Publications/ SME XPO 2024