Declared data

Why declared data is the future for marketers and CX executives

“Declared data” is a hot topic in today’s marketing circles, but what does it actually mean? And why is it being proclaimed as the future for people-based marketing and customer experience (CX)?

Declared data is information that has been explicitly shared by a consumer in an informed and consenting way. It is a collection of insights about an individual’s behaviours, motivations and intentions that has been obtained by directly asking the individual specific questions about their experience with a brand or business. This may be via an offline interview or interaction, such as a focus group, or online through a web form or digital survey.

Declared data, a type of first-party data or sometimes referred to as zero party data, is now considered the gold standard of consumer data because of the way it directly encapsulates the consumer’s actual experience. This provides insight into consumer intent, rather than relying on perceived or inferred information.

Let’s take a look at the different types of consumer data that marketers can leverage: 

  • First-party data (also known as declared data or zero party data): information collected through a direct relationship with the consumer
  • Second-party data: another company’s first-party data that you have access to, such as Facebook’s data set or partner brands
  • Third-party data: information collected by an entity that does not have a direct relationship with the consumer, such as credit reporting agencies or data brokers

Marketers have bought and used third-party data for years, but in an age where the value of the consumer voice is at an all time high, it’s losing its competitive advantage. It’s less accurate, often stale and lacks relevance. It can also be in breach of new privacy legislation around the world, for example the EU General Data Protection Regulation (GDPR) which came into force in May 2018.

An even bigger threat to the use of third party data is the California Consumer Privacy Act (CCPA), which gives people the right to know whether their personal data is sold or disclosed and to whom, as well as the right to refuse its sale. It will force companies conducting business in the state of California to implement structural changes to their privacy programs, and is anticipated to be adopted in some form across the United States.

First-party data is exempt from this issue, as, by its nature, it is willingly and directly supplied. One survey found that 81% of marketers reported getting the highest ROI from first-party data, with only 61% citing third-party data. 82% of marketers plan to increase their use of first-party, with one in four intending to decrease their use of third-party.

The value of first-party data can be clearly defined:

  • It belongs to your brand and doesn’t cost you anything to use and reuse
  • It’s relevant and accurate giving you the greatest insight into your actual customer (and better define the most ideal prospects)
  • It is based on actual transactions, behaviours and interactions with customers themselves 

The promise of first-party data is that when utilised effectively, it offers a unique opportunity to optimise the consumer experience and provide greater personalisation. Marketers with a clearly defined strategy for centralising customer insights armed with this type of data, hold the keys to understanding consumer wants and needs. 

At the same time, first-party data can be difficult to obtain at scale, due to limitations in how it is has been traditionally captured. For example, focus groups tend to have a limited number of participants and are resource intensive.

What’s needed is to create an immersive experience that scales. Best practice dictates that customers should be given the chance to answer questions and select options. This allows them to actively personalise their own experience, whilst marketers are maximising limited time and budgets. These voluntary interactions cultivate trust between brands and consumers and increase loyalty and lifetime value. 

Holding ongoing conversations is equally important. Using details collected long ago can lead to inaccurate insights and make the consumer experience feel irrelevant. For example, a customer who used to purchase children’s products may no longer have school-age children.  

In summary: first-party, declared data inherently has higher accuracy and relevance than data inferred from browsing or purchase behaviours, or obtained from another business. By continuing to engage with your customers, and offering them more value for the information they share with you, insights from declared data can be an instrumental part of your marketing strategy and the tool with which to optimise the consumer experience. 

Not sure where to begin? Check out our guide 9 Ways to Better Your Business with Consumer Insights.