There’s no question that leading marketers are driven by data. However, while Salesforce’s “State of Marketing” report says that the highest-performing marketers use DMPs as their most essential marketing technology, “only 23% of marketers are extremely satisfied with their ability to use customer data to create more relevant experiences.”
In short: Marketers understand the value of collecting consumer data, but they don’t always hit the mark when it comes to using it. One reason is because marketers — and their integrated sales and service teams — have so much first-, second-, and third-party data at their disposal.
It’s important to know that second-party and third-party data are crucial pieces of the data pie. In this blog, however, we’ll focus on first-party data, which can act as a strong foundation for creating a consumer-centric marketing strategy.
First-party data is consumer information that a company collects itself — or in other words, “owns.” For example, one company might have first-party data from consumers stored in its CRM. This type of data might include demographic information, email addresses, purchase history, website interactions (from only the company’s website), ad impressions, and more. The great thing about first-party data is that it’s specific to a company’s existing consumers, which allows marketers to create highly personalized experiences.
Consumer information, first and foremost, has to be protected and used wisely, especially with the 2018 adoption of the General Data Protection Regulation (learn more about the GDPR here). Marketers, then, need to play their part in being good data stewards.
With those requirements in mind, using first-party data appropriately can hold huge benefits for both marketers and their consumers. In fact, 63% of millennials, 58% of Gen Xers, and 46% of baby boomers are willing to share their information to receive personalized offers and discounts, according to the “State of the Connected Customer” report. So it is understandable that 94% of advertisers turn to their CRM as a known first-party data source to optimize advertising efforts.
Here are five ways to make the most of first-party data.
Oftentimes, the trouble marketers run into with lots of information is just that: They have lots of (potentially useless) information. To confront this issue, it’s important for marketers to decide early which data they need to collect, organize, and analyze to meet strategic marketing and business goals.
If you’re wondering how to collect first-party data, first consider some of the key components you might need to begin personalizing marketing communications, such as emails. You should consider collecting a consumer’s name and their email address as a starting point, and you can then build your first-party dataset from there.
You may be familiar with email list cleaning and why it’s beneficial for email marketers. The same idea also holds true for other objective consumer data (for example, consumer names, number of purchases, website visits, email clicks, phone numbers, and so on). Cleaning and — perhaps more importantly — structuring your objective data can be a huge boon for marketing, sales, and service teams.
According to the SEC, “Structured data is data that is divided into standardized pieces that are identifiable and accessible by both humans and computers.” PCMag.com adds to this definition, saying that structured data “can be immediately identified within an electronic file such as a relational database that is structured in rows (records) and columns (fields).”
In short, structuring data means organizing it so marketing and other teams can readily access, understand, and use it.
Having access to consumer data is a significant responsibility, and typically not everyone in an organization needs that privilege. Managing access to data is not only a privacy issue (think GDPR), but it’s also a smart business practice. Ensuring that leadership can get behind assigned roles and responsibilities will be a key step in managing access.
As we mentioned earlier, first-party data is only one piece of the puzzle, but you can still use it to lay the foundation for meaningful consumer journeys. Take your existing email subscribers, for example. When you send an email to them and see how they click on certain pieces of content, you can begin to build out their data profile with additional information. This email interaction data can be used to dynamically serve a consumer personalized content or offers via future emails or on your website.
If you’ve been a smart data collector, you probably know a lot about your audience and their preferences from your data. While you can send them 1-to-1 messages, such as a personalized email, you can also use your existing first-party data to broaden your dataset — thus expanding your reach.
For instance, you can use consumer information you’ve collected to create lookalike audiences on Facebook, a feature that helps you find similar audiences. Now, you can run targeted Facebook ad campaigns to go beyond your limited dataset, which is only one example of how data can help increase the reach of your content and offers.
First-party data is just the beginning of your journey. Once you build a foundation to deliver personalized messaging, you can then begin to layer in second- and third-party data to beef up consumer engagement across more channels than ever before.