Smart Marketers Should Turn to First-Party Data First

Opinion: Combining it with third-party data can boost ROI

Chances are, you already have this data just sitting in your marketing systems ipopba/iStock

Until recently, it was easy to build campaigns with third-party data from social media platforms for effective customer acquisition. Many marketers leaned heavily on Facebook and other data providers to engage audiences and drive new purchases.

But thanks to the European Union’s General Data Protection Regulation and the Cambridge Analytica scandal, many consumers tightened their privacy controls and more closely watch the data they share. Business-to-consumer marketers can no longer rely on third-party data as the main foundation for marketing campaigns.

Instead, smart marketers are shifting to a more valuable asset: the data their customers willingly share. Chances are, you already have this data just sitting in your marketing systems, and you’re not using it to its fullest potential.

When used correctly, first-party data can drive more personalized and targeted campaigns that don’t just drive one-time purchases, but actually develop long-term customer loyalty. Even better, first-party data complies with new regulations and increasing consumer demands for data security.

How first-party data leads to better marketing campaigns

First-party data is the customer telling you their story with their actions. It’s their preferences, buying habits and customer-service feedback. This data can come into your marketing systems a number of ways, both explicitly and implicitly. For example, you can use surveys to ask people if they have a favorite artist, and target products and services based on that information.

If people are really interested in an artist, however, it will also show in their actions. They’ll search for items created by that artist, they’ll browse pages on your site related to the artist, they’ll open emails that feature the artist and, ultimately, they’ll purchase things related to them. Based on this type of data, you should have an idea of the interests of your customers before they respond to a survey.

This data that comes from customers themselves is, almost by definition, the most valuable tool you have—and you don’t have to pay a social media company to get it.

Make it easier to leverage first-party data

Unfortunately, your first party data is likely spread out across multiple marketing systems. You have data in Google Analytics about website browsing, social media data, purchase data in your ecommerce platform and email data in your email service provider. You are most likely sitting on a ton of insights, but it’s all difficult to access at once.

Regardless of how sophisticated or data-driven your marketing organization is, your data is probably disconnected. It’s a real challenge to understand your customer as they move across channels and devices. That’s where identity resolution comes in. By tying each individual to a single customer profile, you can understand exactly how your buyers behave by collecting and unifying all this data.

Then there’s using the data. Your customers know when an email isn’t personally directed at them. Maybe it doesn’t include their name, or it suggests products that aren’t tailored to their interests and preferences. Users filter these messages out immediately. True personalization is often the only way to gain attention, and this requires first-party data.

Making the best use of first-party data doesn’t have to be so difficult. Technology like B2C customer-relationship-management systems can help unify your first-party customer data and connect it directly to your marketing execution engines. This moves your company’s data into the hands of your marketers, rather than that data being inaccessible. Then, when you bring in third-party data to fill in the gaps, your campaigns will be far more successful.

Three use cases to get you started

This is easy to talk about in the abstract, but how do you put it into practice?

  1. Engage at the right time: Use the data you’ve collected about individuals’ purchases to send them triggered alerts right when a product they’ve bought in the past is on sale or back in stock.
  2. Make relevant product recommendations: Use a customer’s historical purchase or search behavior to suggest other products they may enjoy. If a customer has been searching for sippy cups, for example, send information about toddler utensils and bibs.
  3. Personalize email messages: Email is perhaps the perfect example of using first-party and third-party data together. Build personalized emails based on first-party data you’ve collected—images of products the person has browsed or recommendations based on other purchases and searches—and then fill in gaps with third-party information. For example, if you have limited data about a customer, you can use third-party information to fill in the gaps about a person’s age or where they live to better personalize the messages.

Third-party data still has its place in marketing, and leveraging it alongside first-party data can produce powerful results. However, with so many options for gathering, organizing, viewing and leveraging the stories your customers tell you themselves, you don’t really need it. By focusing on first-party data first, you can unlock your customer relationships and drive more return on investment than you ever imagined.

Eric Keating is vice president of marketing at B2C CRM Zaius.