Customer data is a nuanced aspect with varying meanings for different companies, depending on the context. A brand’s proficiency in capturing, organising, and activating customer data serves as a tool to address diverse enquiries and mould customer experiences.
A comprehensive and interconnected approach fundamentally empowers marketing experts to revolutionise how brands engage and interact with consumers. Essentially, having appropriate data helps marketers set practical and achievable goals.
The prevalence of tracking in digital marketing contributes to over 70% of Americans sensing that their online activities are extensively tracked and analysed by advertisers, tech companies, and other businesses.
Conversely, tracking has empowered brands to furnish consumers with a more personalised experience, anticipate user intent, and uncover avenues for growth.
In light of the decline of third-party cookies, businesses must be prepared with alternatives that facilitate more compliant data collection. Here’s a guide on constructing and utilising a first-party data strategy to enhance digital experiences.
What Constitutes First-party Data?
Before delving into the complexities of capturing and utilising this type of data, let’s zero in on the definition of first-party data.
First-party data, also referred to as 1P data, comprises information directly collected by a company from its audience. The term ‘first-party’ designates the entity that gathers data points to construct customer profiles for their marketing campaigns.
Marketing with first-party data empowers companies to address each customer’s interests and needs. By having access to detailed data such as consumer preferences, digital interactions, purchase history, and behaviour, brands can deliver personalised experiences based solely on the data their customers willingly share.
Departing from strategies centred around third-party data can foster transparency and boost consumer trust in their brands. In the past, overreliance on 3P data led to advertisers tapping into only 40% or less of their company’s first-party data potential.
Today, first-party data remains a work in progress for many businesses, with challenges that marketing experts are still working to overcome.
Hurdles in Utilising First-party Data
Here are some of the prevalent challenges marketers encounter when seeking to leverage customer data:
- Creating customer profiles: Consumers typically interact with brands across various channels and platforms. Businesses can attain a unified customer view and personalise marketing messages only by amalgamating data across channels and consolidating multiple customer profiles.
- Forming audience segments: Brands aiming to transition from a 3P data strategy must build or expand their first-party data collection. When executed effectively, they can delineate and generate audience segments based on user interactions. Moreover, such segmentation can assist companies in monetising their websites or mobile apps more effectively.
- Devising actionable data strategies: Strategy historically guides the entire process. This is why companies need to comprehend the resources and data they must collect. Subsequently, they can tailor the strategy for every touchpoint and map it across the customer journey.
Formulating a first-party data strategy might seem like a complex endeavour. However, reassessing your practical strategies can be the key to establishing more direct relationships with your audience and effectively conveying how your customers will benefit from sharing their data.
Strategies for First-party Data Collection
79% of American consumers are concerned about sharing their personal information online. At times, such privacy apprehensions can dissuade clients from engaging with or making purchases from a company.
Recent changes to third-party cookies underscore businesses’ need to invest in data transactions that deliver value, employ a data management platform, and centralise all CRM and tracking data.
Acknowledging that consumer data is a privilege that companies should continuously earn is vital. With brands now obligated to be transparent about data collection, they must obtain consent from customers to track and utilise their personal information.
Here’s what brands can do to establish a value exchange, entice consumers to opt in, and boost customer retention:
- Clearly communicate the reasons behind data collection and usage
- Ensure transparency by empowering customers to control their privacy settings
- Emphasise the benefits of sharing data, such as an enhanced customer experience, exclusive offerings, loyalty programs, etc.
From the business perspective, brands must effectively capture and manage 1P data. This way, they can construct compelling touchpoints, deliver more pertinent client experiences, and fortify customer relationships.
If you missed our recent article discussing the impending shift from CCPA to CPRA, cheque it out here to learn how these changes will impact your company’s data compliance efforts.
Let’s delve into a closer examination of three essential activities crucial for successful first-party information capture.
1. Establish a Foundation for Data Management and Acquisition
Identifying inefficiencies and closing gaps in the data and analytics structure can assist businesses in managing, integrating, and formatting data effectively.
Efficient integration serves as the bedrock for leveraging consumer data. This underscores the significance of marketing professionals implementing robust data acquisition processes and specific technologies like LMS Sync – Phonexa’s lead management solution – to tap into audience insights, derive value from every lead, and recalibrate marketing strategies.
2. Implement Tailored Approaches to Data Collection
Offering the audience more control and education regarding data privacy stands out as one of the principal ways to earn their trust.
After gaining customer trust, companies can collect 1P data through website tracking pixels, CRM, marketing automation solutions, and Data Management Platform (DMP).
In essence, adhering to best data privacy practices and ensuring compliant data collection can assist brands in enhancing customer experience across their marketing channels.
3. Develop a Convincing Value Proposition
Encouraging customers to share personal information often necessitates value propositions such as transactional rewards, incentivised offerings, or loyalty programs.
Brands have various opportunities to learn about customers. For example, leveraging a post-purchase customer experience enables companies to gather insights about the client and the product, enhancing marketing and business communication. Additionally, retargeting campaigns and 1:1 communication through social media, phone calls, or email can also streamline consumer data capture.
In summary, marketers must adopt a more sophisticated approach to data utilisation and a more granular strategy for capturing it. Elevating engagement through owned marketing channels will undoubtedly reduce friction, improve customer retention, and reveal opportunities for gathering valuable data.
First-party Data Sources
In the present landscape, consumers wield greater control over their experiences. They engage with brands across an array of devices and channels, prompting businesses to continually forge new touchpoints and personalise these engagements.
Harnessing first-party data aids marketers in shaping and refining the customer journey, which encompasses three fundamental stages:
- Establishing connections and fostering repeat customers.
- Cultivating emotional relationships to enhance customer lifetime value.
- Delivering exemplary customer service to combat attrition.
Each stage contributes to honing a brand’s customer-centric approach and ensuring customer satisfaction. Nevertheless, accumulating a substantial volume of first-party data and its optimal utilisation necessitate a strategic approach to digital interactions and data origins.
Let’s delve into a more detailed exploration of some of the premier sources of 1P data.
|Your company website serves as a rich source of high-quality data regarding visitors and customers. It provides insights into on-site behaviour, transactions, names, and email addresses that can be utilised for targeted retargeting and engagement campaigns.
|Mobile marketing heavily relies on in-app data businesses or developers capture concerning customers and prospects. Recognising that app users often constitute a brand’s most loyal supporters, it becomes imperative to gather first-party data. This aids in enhancing audience understanding, refining targeting, unlocking optimal app features, sending push notifications, and maintaining a competitive edge in a privacy-focused, customer-centric environment.
|Social media marketing is integral to any business strategy, offering an excellent avenue to connect with the target audience and gather first-party data. It allows for a deeper understanding of the intent and behaviour of potential and active customers, creating audience segments, delivering personalised content, and insights into overall customer satisfaction.
|Email and SMS
|Brands can collect and leverage detailed 1P data through email and SMS marketing software. With Phonexa’s E-Delivery email and SMS solution, businesses can aggregate data related to their SMS or email campaigns, refine and nurture email lists, deliver personalised messages, and execute campaigns tailored to different segments.
|One of the most effective ways to gauge customer opinions about a brand, service, or product is to ask them directly. Conducting a quick poll or IVR survey enables businesses to engage customers and amass 1P data. An IVR survey allows consumers to share their experiences and, in the process, generates high-quality data about these individuals.
|Numerous meaningful customer interactions occur during phone calls. Implementation of Call Logic — Phonexa’s call tracking and distribution intelligence platform — facilitates first-party data collection. It aids in understanding more about active campaigns and clients, creating customisable journeys, and acquiring detailed attribution.
Utilising First-party Data for Marketing Success
1P data forms the foundation for comprehending and establishing connections with customers. Nevertheless, a significant number of marketers still lack suitable data strategies and technologies to unlock its complete potential.
The following outlines how businesses can employ first-party data for marketing purposes and activate customer data to propel business growth.
Determining the Optimal Utilisation of First-party Data
Setting goals is a top priority for any company aspiring to formulate or implement a first-party data strategy. Businesses should commence by discerning how they intend to communicate with customers through their brands and the offerings they wish to present.
Consider addressing the following queries to ascertain the primary marketing goals that will assist in crafting a successful strategy:
- What constitutes an outstanding omnichannel experience for your customers?
- How can you initiate real-time personalisation?
- What captivates your audience?
- To what extent can you identify trends and comprehend specific customer behaviour?
- Can you gain a clear insight into first-party data?
- How do you re-engage customers who abandoned a conversion flow?
Develop a Strategy for First-party Data Collection
Mastering the art of gathering first-party data is the cornerstone of an omnichannel strategy. It contributes to enhancing customer loyalty, retention, and satisfaction for companies.
The initial step for businesses is constructing a data roadmap outlining the necessary initiatives to achieve predefined objectives. This tangible outline typically encompasses deliverables, action plans, strategic goals, gap analysis, investment priorities, and more. The roadmap facilitates the creation of a seamless path to purchase, enabling clients and prospects to explore products and discern their desired outcomes effortlessly.
Seek Permission for Data Collection
It’s common knowledge that businesses must be transparent regarding data collection. Securing your target audience’s comprehension of the reasons, benefits, and your brand’s obligations associated with first-party data collection is pivotal for the brand’s well-being and future growth.
Transparent data collection isn’t solely about grappling with intimidating acronyms such as IDFA, GDPR, or CPRA. It is fundamentally about instilling trust and cultivating enduring customer relationships.
Cheque out our recent article detailing the impacts of CPRA implementation on how businesses manage consumer data, effective from January 1, 2023.
Experiment, Refine, and Reassess
The learning, experimenting, and refining process is perpetual for marketers engaged in first-party data collection.
Dedicating time and energy to testing is crucial. It assists brands in discovering the most productive methods for gathering customer data and fine-tuning the utilisation of 1P data. A/B testing of ad creatives, email templates, or campaigns is a valuable practice to gauge the target audience’s response.
Use Cases for Marketing with First-party Data
A comprehensive understanding of the entire buyer journey is pivotal for marketers seeking to enhance a brand’s overall marketing efficacy.
The strategic integration and activation of first-party data across all touchpoints empower brands to adopt a more customer-centric and triumphant approach. A case study presented below illustrates how the collection and adept use of first-party data, coupled with the right martech stack, can significantly impact brand consideration and customer experience.
Another compelling illustration showcasing the potential of prioritising first-party data in propelling business growth is the case study of Kia’s transformation into a more customer-centric enterprise.
For Kia, leveraging customer data involved formulating cross-channel marketing strategies, pivoting from car dealers to end-users, identifying the necessity for novel website features, implementing cutting-edge tech solutions, and much more. This journey is just a glimpse into the company’s ongoing digital transformation as it navigates the landscape of privacy-centric practices.
Grasping First, Second, and Third-party Data
Let’s recap our understanding of first-party data and delve into the key distinctions between first, second, and third-party data.
Key Insights: First-party Data
- First-party data constitutes the information gathered by brands from their customers.
- It encompasses digital interactions, subscriptions, customer preferences, in-store purchase history, cross-platform data, etc.
- Marketing automation solutions, CRMs, DMPs, or website tracking pixels can facilitate the collection of first-party data.
- First-party customer data is instrumental in acquiring audience insights, personalising content and advertisements, predicting purchasing behaviour, and adhering to the latest privacy regulations.
- It ensures data quality, accuracy, and relevance.
Second-party data is essentially another company’s first-party data, which the company chooses to sell or share with another entity.
Here are several instances of second-party data:
Comparing First-party Data and Second-party Data
Certainly, each of the three categories of customer data carries its own advantages, drawbacks, and distinctions. Let’s examine the key characteristics.
Here are some primary advantages of second-party data:
- Enhanced insights into existing customers and prospects
- Improved targeting capabilities
- Opportunity to broaden a company’s marketing reach
- Insights into similar audiences
Key drawbacks of using second-party data:
- Varying standards of data collection and management
- Limited knowledge of data quality
- Potential issues with data integration
In comparison, it’s evident that companies utilizing second-party data lack both exclusive ownership and the competitive edge provided by first-party data.
Third-party data is information acquired from an external broker, a third party that did not originally collect the data but aggregated it from diverse sources. This data typically stems from online social media interactions, search history, or online transactions.
Here are a couple of instances of third-party data use:
- A ski resort aiming to advertise in Utah purchases information from a broker or marketplace on local internet users.
- A customer support team can utilize pertinent third-party data points to better understand customer needs and enhance service quality.
Comparing First-party Data with Third-party Data
Considering its nature, third-party data can encompass a variety of insights that might not be matched even by first-party data. However, there’s a caveat: the methods employed to collect it.
There is no way to verify whether a third party was adhering to data privacy laws while gathering customer information, which is one reason why the use of such data is frequently restricted.
Let’s delve deeper into the advantages and drawbacks of using third-party data.
Here are some of the primary advantages third-party data offers:
- Helps in expanding upon existing customer profiles.
- Provides additional audience insights.
- Often distilled into audience segments.
DIsadvantages of using third-party data:
- The use is often restricted
- Data may lack uniqueness
- Parts of datasets can be of low quality
- Lack of transparency in data collection
- Possible issues with data integration
From a business standpoint, utilising third-party data can be risky due to the lack of transparency in data collection. Besides the risk of breaching data privacy, the information might lack uniqueness.
Since competitors can purchase the same datasets from brokers, you might likely disregard this data and concentrate on capturing relevant and valuable first-party customer data.
Uncover the Potential of First-party Data
It can’t be overlooked that third-party data fails to sustain success, prompting brands to seek ways to obtain distinctive and pertinent consumer data. Many astute marketers concentrate on reshaping their brands into customer-centric entities, amplifying the use of first-party data, and crafting data-driven strategies.
Book a consultation to learn how Phonexa’s suite of marketing automation solutions can help you build customer profiles, gain audience insights, and recalibrate your marketing strategy.
Frequently Asked Questions
What is first-party data?
First-party data refers to information gathered by your organisation about your customers or website visitors.
Why is first-party data important?
First-party data gives marketers access to unique information that enables control over data quality and accuracy, enhances reliability, improves personalisation, and ensures data privacy.
How is first-party data stored?
Companies typically use CRMs or Customer Data Platforms (CDPs) to store collected first-party data. CRMs assist businesses in leveraging customer information, such as family and education details, multiple purchases, career information, and website visits.
Regarding CDPs, they help brands organise collected data into encrypted profiles, providing a centralised view of customers across all touchpoints.
How can I acquire more first-party data?
Businesses can gather more first-party data by profiling customers more deeply through polls, IVR surveys, feedback forms, and follow-up emails. Additionally, brands can utilise call tracking software to obtain detailed attribution on inbound call traffic and analytics tools to garner in-depth behavioural data about clients and prospects.
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