Customer experiences are one of the most complex challenges marketers face today. Consumers are constantly streaming data about their wants, needs, and preferences with every interaction they have with brands.
And in return they expect companies to provide relevant and personalized experiences on every channel, or else they will go elsewhere.
Consumer data is no longer optional. It is the key to marketers’ success. For years companies have relied heavily on third-party data for consumer information to drive their marketing strategies.
But today’s leading brands are increasingly turning inward, to their first-party data, to gain richer consumer data and create better customer experiences.
So what is first-party data?
First-party data is the customer information brands collect and own themselves, including website, mobile apps, call centers, and anything else that is produced by the brand or within their products and services.
Third-party data, on the other hand, is sold by aggregators who collect information on consumer demographics, online behaviors and purchase history as well as other types of data from a variety of external sources.
What makes first-party data so valuable is that it is able to provide powerful insights into your company’s relationship with your customers and their paths to purchase, which third-party data cannot explain.
A recent survey conducted by Econsultancy, in association with Signal, reported that respondents found their first-party data to deliver the highest return on investment compared to other types of data, and at least two-thirds of the 300+ senior marketers surveyed believe first-party data is the best path to better customer understanding and business performance. 82% agree or strongly agree that their companies will increase their use of first-party data over the next year.
How can marketers like you take advantage of the first-party data your company already owns?
You can start with the data generated by your mobile web/application channels, offline sources/point-of-sale, CRM, email/SMS databases, beacons and sensors, as well as your call centers. These sources provide rich insights into various aspects of your customers’ lives and interactions in both the online and offline worlds, helping you to create a more complete view of your customers and their behaviors.
First-party data is key to understanding the customer journey and personalizing your customer experience across your channels, to deliver the right content at the right time when your consumers want it.
Content personalization will only become more important as mobile device usage increases. You need to take full advantage of the limited real estate and time you’ve got to deliver your content quickly enough to still be useful for your customers.
The greatest challenge for marketers right now with using their own first-party data is a lack of trust across the organization. Most companies find outside sources more trustworthy than their own for a number of reasons.
Data accuracy is one. Errors are often introduced when data is collected, processed and used. For example, point-of-sale information is prone to entry errors because they rely on human beings to input and process the data. Recency issues can also arise as data ages or as it gets passed from one system to another for processing.
To overcome these challenges, high-performing brands are doing the following to take full advantage of their first-party data:
- Conduct a data audit to identify what data is currently being collected and how it is being processed and measured, and the gaps between the two.
- Develop a data strategy that addresses how first-party data will support business goals and how it will be collected, managed and stored, with practical guidance to all levels in the organization on how they can use this data.
- Establish data governance policies to define what data is measured and how it is accessed and shared across the organization.
- Plan long-term measurement and benchmarking based on first-party data.
- Invest in resources to move the data strategy forward – whether it is providing training to current staff, using external vendors, or hiring new employees with the sufficient skills and knowledge to execute these data-driven initiatives.
Surveys like this goes to show that traditional marketing strategies may not be enough to win the attention and dollar of today’s consumers.
Successful brands will need to look beyond their existing consumer information and tap into the power of the first-party data they own.
A personalized customer experience that truly adds value will bring consumers to engage with your brand and ultimately drive real sales for your business.