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May the days of relying on third-party data rest in peace. What’s old is new again and it’s time to start re-focusing on first- party data
The growth of privacy controls and regulations isn’t giving marketers any choice. Apple’s iOS 14, released last year, gave users more ability to restrict sharing of their data with other companies. Next year, Google plans to eliminate third-party cookies. And around the world, we’re seeing stricter privacy regulations, including GDPR in Europe and CCPA in the US.
While this all seems to strike a blow for advertisers, there’s actually a tremendous upside for brands that embrace first-party data. The shift toward acquiring, storing, and using first-party data for marketing helps brands create more compelling customer journeys, deliver better customer experiences, and ultimately win competitive advantage.
3 benefits of first-party data for marketing
Brands collect first-party data directly from their customers with their consent. There are many ways companies can collect it, including customer surveys, online behavioral data, social messages, and customer feedback.
Here are some of the top benefits of first-party data for marketers:
- Unlike third- or second-party data, first-party data is uniquely yours (as in, your business), collected at various touchpoints along your customer’s journey
- You can glean much deeper, richer and accurate customer insights than from other types of data
- Channel affinity, product affinity, shopping behavior, predicted lifetime value, and even loyalty status are incredibly valuable for forming a complete view of your customer, and delivering the personalized experiences that fuel lasting customer relationships.
Remember, this is data your brand collected, so your competitors won’t have it. But since you can’t just buy first-party data, you probably don’t have as much as you’d like, and what you do have may be underutilized.
However, the more first-party data you collect and use for marketing, the deeper understanding you’ll have of your customer. You’ll be able to offer them richer, more relevant experiences that far surpass to what your competitor can do.
Many top brands are already using first-party data to great advantage (some might argue too great of an advantage) by building out competitive products that they know their customers want based on that data.
As we head into 2022, marketing technology will become more integrated, allowing marketers to focus on creating personalized CX for D2C success.
First-party data benefits customers too
Ultimately, a focused approach to first-party data is about improving the experiences you provide customers. But a customer doesn’t always see it that way, at least at first.
Unfortunately, in the era of digital marketing, customers are so jaded by irrelevant, invasive, and sometimes “creepy” marketing, that they’re hesitant to give marketers unbridled access to their personal information. With first-party data, you can break this cycle.
Instead of random offers they’ll toss or ignore altogether, customers will get relevant, personalized experiences. They’ll see the real value that you can provide and entrust you with their data.
They’ll have positive experiences and you’ll build lasting customer loyalty.
But making this a reality requires a strategic approach to capturing their consent and data.
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First-party data: Getting started
With the rise of the privacy-first web, unless you use first-party data instead of third-party data, your return on ad spend will be dropping significantly. You won’t be able to easily tailor ads to unknown (unidentified) consumers in the hopes of acquiring them.
But where do you start? A good first step is to evaluate what you already have. Determine if you’re fully leveraging it, and if you aren’t, what’s standing in your way?For many businesses, it can be any of the following reasons:
- The quality or accuracy of data is poor
- Lack of consent to use it
- Data isn’t stored in a way for it to be properly used by marketing
- Lack of technology to fully leverage it and turn it into money
You may find that you’re sitting on a gold mine of data, but haven’t fully harnessed all of its potential. Often, breaking down data silos and getting the right technology in place to create a single, unified view of your customer lets you maximize the value of data you already have.
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Game on: Earning the customer’s consent
Website browsing and purchases tell you a lot about customers, but you learn much more when they directly and willingly share information with you.
When a customer consensually divulges data about themselves to a brand, usually as part of a clearly defined value exchange, and with an understanding of how the data will be used, that’s earned data.
Offering some immediate, incentive-based value to the customer is great way to encourage their participation. Consider crafting branded games, where you offer discounts or other rewards in exchange for the customer’s consent to their data.
- “Take our quiz and be entered in a drawing for a $50 gift card.
- “Fill out this survey and have a chance at winning 30% off your next purchase.”
- “Grab this bonus PDF with extra tips and be added to our premium e-newsletter!”
As always, be fully transparent with the customer about what data you’re collecting, how you’ll protect it, and what you plan on doing with it.
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Improved CX, better outcomes
By creating a strategy to responsibly acquire, store, and utilize first-party customer data, you’ll accomplish much more than compliance with data privacy regulations. Of course, compliance is critical: Your legal and marketing teams must be aligned when it comes to devising the strategy around consent and data capture.
But ultimately, the end goal should be ensuring better business outcomes by delivering more satisfying experiences and greater value to your customers.