Types of customer data: Definitions, value, examples
Types of customer data serve distinct purposes. Identity data, descriptive data, attitudinal data, behavioral data defined, with examples.
In a recent study, only 36% of marketers said they have a good understanding of how the disappearance of third-party will impact their business.
Marketers: don’t be late to the party as the cookie crumbles. Start building a first-party data strategy so you can acquire and manage consumer data effectively.
It’s no secret that this is the most valuable data, offering deep behavioral and demographic insights to create target segments, draw contextual personas, and build more relevant and impactful messaging.
A focus on customer experience, partnerships to share data with retailers, walled gardens, and a strong foundational data plan will set the consumer product industry up for success. Here are some best practices to help build this first-party data strategy:
- Balance the value exchange
- Take a step-by-step approach
- Unify data
- Think beyond marketing
- Get leadership involved
- Establish a data governance policy
Let’s take a closer look at each of these planning steps.
First party data strategy: Be clear about your intention
Acquiring consumer first-party data is a value exchange. If there is transparency and balance in this exchange, consumers will willingly share their data and stay.
Consumers are already trusting brands with a purchase, but to carry this trust forward you need transparency by not only asking for permissions but also explaining clearly what data you are collecting and what it’s being used for.
For example, when you request my birth date, state clearly that you want to surprise me with a birthday special offer. You will be pleasantly surprised how many people will respond. Your first-party data strategy must invest in making the customer experience compelling, to ensure you attract consumers.
Finding this proposition can drive significant value. For example, Glossier engaged with its 2.5 million ardent followers to co-create its product offerings.
Treat it as a courtship: Building profiles with first party data
Would you ask your date on the first meeting to share their innermost feelings? Obviously not. Similarly, take a step-by-step approach to building relationships with your customers and your first-party data strategy.
Begin with a simple request, such as email only and slowly put them in charge of sharing more about their preferences, likes, what they want to hear about, what inspires them, and issues they want to talk about.
This approach of progressive profiling supports you to be contextually relevant and collect the right information at the right time. Besides nurturing these relationships over time, put some effort into getting feedback and tracking satisfaction via NPS measurement.
The power of a complete view
A unified view of consumers across touch points supports consumer product marketers’ ability to execute digital marketing efforts 1.5 times more cost efficiently than without.
It also enables them to handle the major retail channel shifts happening. As retailers themselves are building their own e-commerce sales and digital media platforms, they need equal support from brand marketers to find the right message for the right audience.
CPG brands in a cookie-free future: Brushing off the crumbs, moving forward
Consumer products companies will be hit hard by the loss of third-party cookies, but can seize new opportunities by building direct relationships with consumers.
Besides, let’s not forget that first-party data will put brands in a better position to negotiate and collaborate with retailers. Imagine the power you’d have with insights on uptake, conversion and retention on a new product or promotion when you’ve already tested it.
This can support talks with retailers to build effective merchandizing and promotion strategies, both for the shop floor and website.
Get outside of the marketing silo
A first-party data strategy isn’t just about marketing, but the full value proposition and all the touch points across the journey.
While consumers today expect consistent, personalized experience at every point only 30% of companies are creating a single view across channels. As a brand you’re not just responsible for marketing the product, but also consumer queries, purchases on your e-commerce site, returns, complaints, advocacy, and building a strong, loyal consumer base.
It’s also about demand sensing and new product development. For some categories such as consumer durables, proactive service, warranty extensions, parts and repairs are intuitive extensions of the direct consumer relationship.
U.S. companies lose more than $75B per year just because of poor customer service. So there’s a tremendous opportunity to build a direct consumer relationship by getting the basics right – recognizing the consumer, anticipating their issues – and first-party data can make that happen.
Bring executive leaders to the table
Take this conversation about first-party data to the executive level so that data silos are broken across the organization and you democratize access for all.
The leadership team needs to answer the critical question: Is their company ready to leverage a single golden record for millions of consumers cross functionally?
You need to set organization-wide strategic goals, identify what data is essential, calculate the associated costs and precise value it brings, besides the associated risk in case of a data breach.
Make data governance a priority
The more complex your organization, the more careful you need to be in how you manage access to data.
A consumer products company with many brands across multiple geographies needs to define what level of access different roles need and what they are legally permitted to use. Think of data governance right from the beginning in terms of how you will share the first-party data across brands, categories, and markets.
Establish a data center of excellence for building common standards, defining roles and responsibilities across markets, driving training needs, and creating protocols and processes within the global organization.
Set internal targets for first-party data acquisition
Imagine setting the number of first-party records as a KPI. That’s actually happening as consumers become more and more selective and skeptical about giving their information. Companies are getting serious enough to set targets.
This is challenging marketers to focus relentlessly on finding the right tactics to increase not only on acquiring first- party data, but also building a stronger and sustainable connection.
Building a robust consumer data management strategy will require not only investment in the right technology, but also acquiring and upskilling the talent pool with the ability to test and learn quickly. Insight is not a function of data, but of how you perceive that data and then put that into action.
Do you really know your customer? Find out how a CDP uncovers the insight you need to power CX that drives growth. Start HERE.
